Thread: BREXIT: UK to fall into recession next year

Brexit to trigger UK recession over coming year: BlackRock

Britain will fall into recession over the coming year and growth in each of the next five years will be at least 0.5 percentage points lower as a result of Britain leaving the European Union, BlackRock Inc (BLK.N) said on Tuesday.

"Our base case is we will have a recession," Richard Turnill, chief investment strategist at the world's largest asset manager, told reporters at the firm's investment outlook briefing. "There's likely to be a significant reduction of investment in the UK," he said, adding that Brexit will ensure political and economic uncertainty remains high. Turnill and his colleagues expect the Bank of England to cut interest rates to zero this week from the current all-time low of 0.5 percent, and expand its quantitative easing bond-buying program next month. "The market is not entirely priced for that yet," said Scott Thiel, BlackRock's deputy CIO and head of global bonds. This means sterling will fall further, although not as low as parity against the dollar unless in "extreme circumstances".

The BoE will resume buying gilts before dipping its toes back into the corporate bond market, Thiel said, noting the European Central Bank's success in narrowing corporate bond spreads through its bond purchases in that market.

Sterling hit a 31-year low of $1.2796 last week, down around 15 percent since the June 23 referendum although it has since clawed back some ground against the dollar and the euro.

New York-based BlackRock oversaw $4.7 trillion in assets globally as of March 31. Of that, $1.5 trillion was in fixed income assets.

The Brexit fallout will result in "materially lower" growth in the euro zone as investment plans are deferred, and have a "moderately" negative impact on U.S. and Asian growth, Turnill said.

Overall, BlackRock expects global investment returns to remain low across all asset classes thanks to more QE from the BoE, ECB and Bank of Japan, and the Federal Reserve keeping interest rates lower for longer than previously expected. In a low-yielding environment, they favor emerging market bonds, developed market investment-grade corporate debt, and selected bank debt in the euro zone's periphery countries. Equities are also a good bet even though Wall Street is trading at its highest levels ever, with easy global monetary policy continuing to support prices. The dividend yield on global stocks is currently around 2.6 percent, an attractive proposition compared to ultra-low and even negative bond yields, said Charles Prideaux, BlackRock's head of active investments, EMEA.

Brexit to trigger UK recession over coming year: BlackRock | Reuters

The Brexit fallout will result in "materially lower" growth in the euro zone as investment plans are deferred

I suspect that for the atrocious ballaches with whom I have the misfortune of sharing my nationality, this will be the silver lining.

You have made a post without putting any thought into it. You have simply looked for "bad news for the UK" and rehashed it here. No input of your own views. The real stupidity is that you have posted something which has been overtaken by events and, because of this, the article is of little consequence.

The Bank of England did not lower the interest rate by 0.5%. It did not lower it at all. Please pay attention and, if you have no idea of the subject, please post about something else and stop opening silly threads like this one.

Aunts May and Aunty Merkel are putting the world to rights, no Brexit discussions in 2016, business figures are up. Interest rates not adjusted. Record low unemployment figures.

Storm in a tea cup

Recession is just a word for non economic growth
Pay freezes and cheaper housing
What's the problem the rich don't richer ,the poor don't get poorer and the Middle classes that have overspent on mortgages or not not saved for a rainy day hey stung
What's the problem

Non Jim, and it's beer o'clock here in China, so bolix to the economy.

I'm starting to think that Texpat might be at least partially right about some things.

Originally Posted by can123

You have made a post without putting any thought into it. You have simply looked for "bad news for the UK" and rehashed it here. No input of your own views. The real stupidity is that you have posted something which has been overtaken by events and, because of this, the article is of little consequence.

The Bank of England did not lower the interest rate by 0.5%. It did not lower it at all. Please pay attention and, if you have no idea of the subject, please post about something else and stop opening silly threads like this one.

then why do you sound so scared ?

Originally Posted by Dragonfly

"extreme"

Bollocks.

Talking the market down so you can turn a profit later is shady as fuck.

Can't imagine anything on this thread can swoon the market, but such a pleasant thought.

more good news,

Brexit causes dramatic drop in UK economy, data suggests - BBC News

According to some ..." That Brexit apocalypse? It just isn’t happening " !!!

That Brexit apocalypse? It just isn?t happening

you are mistaken, we are all very proud of you leaving

Do not believe anything the BBC says they are funded by the EU and are full of lies, the UK will do much better out with countries queuing up to do deals

Do not believe anything the BBC says they are funded by the EU and are full of lies

The Trumpification of British public life continues.

good and the rest of the remaining EU is crashing down far quicker.

EU may well be in terminal decline, and from before Brexit, but much better to tell the people it's alive and well and booming and needs more of the same.