That’s been quite a storm and now after the people of Britain have voted to leave the European Union, it clearly represents a significant decision not just for the UK but for the wider global economy.
Given the rises and falls and ongoing fluctuations of the FTSE, it is obvious that markets are shocked but that does not necessarily have to be a negative development, does it? Indeed, for many British offices of larger global companies, it has to be considered a readjustment.
It was noticeable how the Construction Sector was considered in grave peril after the announcement was made, but surely, the economic implications of a Brexit must have been considered for some time? Contingency plans must be in place.
As Birgit Horn, Show Director at Glasstec mentioned to me earlier this year, a Brexit would cause complications but nothing that would create unresolvable issues.
Whilst the media goes into a savage frenzy, using words including chaos, market collapse and panic, I think Britain is bigger than that and in the long-term, the affects from the referendum will become much more positive.
Some economic commentators have even gone as far as saying that Britain’s ‘future would be largely unaffected in the long term.’
Whilst there will be challenges in the short term with the uncertainty that the country must now face as the exact terms of our exit are negotiated, the financial response today was expected.
History shows that the financial sector loathes uncertainty as was demonstrated by the reaction to the result initially.
Clearly, markets responded negatively to the uncertainty that follows the referendum and that may well be the case for some while to come. However, we need to look beyond the short term and bring into focus the opportunity of change – there are possibilities within our grasp.
Globally the economic situation will be challenging irrespective of our EU membership. There is a worldwide backdrop where the UK GDP will go down over the next few months after the Brexit, and inflation will inevitably rise.
In the longer term however, some financial commentators have stated, ‘the trajectory of the UK economy, and more importantly the world economy, will not be influenced significantly by today’s outcome.”
All market conditions will be unsettled and whilst some may say I’m looking optimistically through rose tinted glasses, I think it is essential to look through this period of uncertainty and focus on longer term opportunity.
Helen Duval 2016