The ‘vote to leave’ result has left investors feeling understandably nervous, and we will watch closely to see how the investment community, Bank of England and European Central Bank deal with the immediate aftermath.

We have today moved into uncharted territory, and it may take some time before investors both at home and abroad fully understand the impact of this result on UK businesses and the economy as a whole.

The EU could start negotiating aggressively, both in order to secure its position, and to send a clear message to the remaining 27 member states. However, there is also the possibility that Parliament delays initiating negotiations for up to two years.

Either way, I believe this will create a challenging new environment that will impact the UK and the EU for the foreseeable future. While the political atmosphere will undoubtedly be tense, investors can take reassurance from the following points:

  • The UK stock market makes up only 6.5% of global listed shares
  • Markets invest globally, and good diversification will help to insulate investors from local uncertainty
  • We also diversify across different asset classes and sectors, meaning that investors are not overexposed in any one area, should that sector be particularly adversely affected.

Trying to move in or out of markets or asset classes or to call the market at upper or lower levels is exceptionally difficult, if you get your timing wrong, this can have a long-term damaging effect on the value or capital and investment returns.  The lesson from history is to keep your nerve at times of market turbulence.

While the economic impact is undoubtedly significant, history has demonstrated that these periods of uncertainty can result in investment opportunities. The UK will remain inside the EU for at least two years and possibly longer. This will allow time to clear up some uncertainties, not least over the UK’s future trading relationship with the remainder of the EU and the rest of the world.

Sterling has fallen sharply following the vote to leave the European Union and while this should help UK exports. It will likely push up inflation thereby squeezing consumer purchasing power and lifting companies’ input costs.

We would also expect the Bank of England to cut interest rates from 0.5 per cent to 0.25 per cent as well as resuscitating quantitative easing.

My message to investors feeling understandably uncertain is going to be we are not in this for today, we are in this together for the next 20 or 30 years.


In the immediate aftermath of the Leave vote, we have seen the resignation of the prime minister, a plunge in the pound and the markets and that is just in the first four hours. While we are convinced this decision will likely come back to haunt us, it is important to remember the limited impact of the referendum in the grand scheme of things. The world will continue turning.

What we have in front of us is a period of uncertainty. The wild swings we’ve seen in the run up to and post referendum are likely to continue. While one question has been answered, it leaves many more.

Who will be prime minister? Will Scotland leave the UK? How will the Bank of England react? The leave vote was unprecedented, and until we receive some sort of clarity over the state of the world we now live in, no one, especially in financial markets, will know how to react.

What all the economists seem to agree upon is that in the long term we will probably be just fine. Britain in 5 years’ time will look very different and I would expect to see a general election before 2017.

Please don’t hesitate to get in touch if you have concerns or would like to discuss anything further and I will endeavour to remain fully contactable at all times.

Clifford Osborne are Independent Financial Advisors (IFA) based in Eastbourne, East Sussex, offering pension planning advice,mortgage advice and more. You can read our VoucherFor reviews here. Our clients often come from Uckfield, Lewes, Brighton, Tunbridge Wells, Hastings, Bexhill, Newhaven, Seaford, Crowborough and further afield.