OECD warns of heightened uncertainty over Brexit

The Organisation for Economic Co-operation and Development (OECD), an influential international think tank, has weighed into the Brexit debate. Its secretary general, Angel Gurria, said that Britain’s exit from the EU would lead to “heightened economic uncertainty, with damaging consequences”. The OECD’s report, ‘The economic consequences of Brexit’, goes on to say that if the UK does vote to leave on June 23, the result would be a major negative shock to the UK economy, with economic fallout in the rest of the OECD, particularly other European countries. In the near term, the UK economy would be hit by tighter financial conditions and weaker confidence and, after a formal exit from the EU, higher trade barriers and an early impact of restrictions on labour mobility, the OECD says. The organisation even quantifies the impact a Brexit would have on the UK economy, forecasting that by 2020, its GDP would be over 3% smaller than with continued EU membership, equivalent to a cost per household of £2,200 (€2,851). By 2030, the OECD says that the UK’s GDP would have shrunk by 5%. This is the latest heavyweight organisation to add its view on the UK referendum, after a declaration at a recent G7 meeting in Japan said a Brexit would be a “serious risk to growth”. However, not everyone is convinced that a Brexit is necessarily bad news for the UK. A report by Capital Economics for Woodford Investment Management states: “A European Union exit would enable the United Kingdom to broker trade deals with emerging markets that could pay dividends for the financial services sector in the long run.” Read Funds Europe’s article on the implications of a Brexit for fund managers here. ©2016 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.