Hermes chief economist: Brexit uncertainty could erode UK's 'safe-haven status'

Stance remains Brexit should be avoided

clock • 4 min read

Neil Williams, group chief economist at Hermes Investment Management, discusses the impact of a possible Brexit on the UK economy, and what can be learnt from Greenland's soft exit from the currency bloc.

The UK referendum on EU membership is the big 'known unknown' for UK assets. It could be called for as early as June or as late as October 2016, with disincentives to carry it over to 2017. Our base case remains Brexit is avoided, averting a destabilising hit to most UK assets. Logic suggests the unlikelihood of the UK wanting to risk weaker ties with its main trading partner (46% of export value, 53% of imports), FDI forgone, and a diluted relationship with the US. But, the uncertainty could soon erode the UK's relative safe-haven status. Should Brexit go ahead (risk case), the mark-...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on UK

Poppy Gustafsson: UK capital markets need to close gap between 'perception and reality'
UK

Poppy Gustafsson: UK capital markets need to close gap between 'perception and reality'

IA annual conference

Sorin Dojan
clock 26 June 2025 • 2 min read
Trust in ONS data 'very low' as financial services turn to alternative sources
UK

Trust in ONS data 'very low' as financial services turn to alternative sources

Follows latest inflation blunder

Sorin Dojan
clock 23 June 2025 • 5 min read
Bank of England leaves interest rates unchanged
UK

Bank of England leaves interest rates unchanged

Next MPC meeting in August

Sorin Dojan
clock 19 June 2025 • 1 min read
Trustpilot