Confusing the symptom and the cause

Pendal Group

We believe the Brexit vote was a symptom and not the cause of the underlying economic and political issues globally; the average voter feels abandoned by the economic and political elite and are making their voices heard. This is a secular not cyclical shift and we believe it will have ramifications for the markets in the months and years ahead. We think central banks will move aggressively to lower rates in the coming months but expect this to have limited impact on the real economy. While the UK economy will likely be hit hard by Brexit and a short-term recession there is a distinct possibility, it isn’t the UK we should be worried about but the Eurozone. This result is proof to us that the EU and the common currency area of the Eurozone will not survive in its current form. The endgame for markets is approaching rapidly. Read more in Vimal Gor's monthly fixed interest newsletter: (VIEW LINK)


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