British vote to exit the EU: what happens now?

Market update
– Shane Oliver, Head of Investment Strategy, Chief Economist AMP Capital

British voters have voted in favour of Brexit: the British exit from the European Union (EU). This means that in the coming months, British and European leaders will begin negotiating the terms of Britain’s departure. Britain’s exit will affect the British economy, immigration policy, and lots more. It will take years for the full consequences to become clear.

In the short run, uncertainty about Britain’s future relationship with the EU, its largest trading partner, could push the UK into a recession. The UK also faces political uncertainty given the weakened Cameron Government and a likely renewed push from pro-EU Scotland for independence. Investors should expect heightened volatility as markets process the implications of Britain’s exit, particularly the risk that it sets off a domino effect of countries seeking to leave the Eurozone
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