It’s been just over three years since the EU referendum but it’s still not clear what Britain’s exit from the EU will really look like – assuming, of course, that it happens at all.
This week, as we edge closer to the next notional departure date on October 31st, we might learn more about the details. And from that, it may just be possible to make a few predictions about how the stock market will react (although there are still plenty of unknowns).
Brexit has been an enigma for equity investors since the starting gun was fired in June 2016. Back then, the 52/48 victory for ‘leave’ wrongfooted the market and caused sterling to slump and index prices to tumble.
Stocks sensitive to the UK economy were hit very hard the day after the vote. Banks like Barclays and Lloyds saw their prices fall by around 20 percent. There were similar swings in cyclicals like the housebuilder Persimmon, recruitment group Hays and the car dealer Pendragon.
But the effects were short-lived and the FTSE All-Share, although volatile, has gone on to rise by 23 percent since then.
Among the many questions now -…
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