In a historic referendum, Great Britain voted to leave the European Union, and the “Brexit” impact on the global markets was immediate—evidenced by market movements where the British Pound, the Euro, European equities, and UK equities were hit hardest.
The outcome of the United Kingdom’s referendum to leave the European Union has stunned forecasters and market participants. The market responded in dramatic fashion to the news, triggering economic repercussions where the Euro fell against the U.S. Dollar from 2 percent to 8.5 percent.
What has been called a “soft revolution” in the UK may also be thought of as the “revenge of the 99%.” The final implications of the decision to leave the EU will not unfold for many years, but some of the initial economic and market impacts are becoming evident.
The Brexit vote—the United Kingdom voters’ decision to exit the European Union—has unleashed political, economic, and financial uncertainty that will play out over the months ahead for affected currencies, equity, and fixed income markets, sectors, and individual firms.
The UK has voted to leave the European Union after 40 years of membership, defying the expectations of most market participants and ignoring the warnings from the International Monetary Fund and other leading economists regarding the negative impacts on trade.
After the United Kingdom (UK) voted to leave the European Union (EU), the global markets shifted to a “risk-off,” with global stocks, the British pound, and the euro all declining while the U.S. dollar, gold, and high-quality U.S. bonds rallied.
Britons voted to exit the European Union on June 23, marking the first time any country has left since its formation. The political consequences for Britain’s Prime Minister were swift, and people around the globe reacted with shock and confusion.