ADDRESSING THE UNCERTAINTY OF THE BREXIT VOTE
By now, most of us probably heard about UK voting to leave EU. There are many commentaries on this topic. One of the questions people are asking is this: Is there a chance that the UK could stay in the EU despite voting to leave?
Yes, there is a scenario where the UK could remain in the EU despite the outcome of the referendum. The UK’s next general election is scheduled to be held on May 7, 2020; however, it may be held earlier due to a vote of no confidence. Such an election could result in a pro-remain government being elected, which orders a second referendum vote where voters this time choose to remain in the EU.
If the UK falls into a recession, such a scenario could materialize. In this referendum 72.2% of the electorate participated, if a second referendum is held, it is likely that we could see higher voter participation. Given how close the vote was 51.9% vs 48.1%, a different turnout could result in a different outcome.
While the news of the UK’s decision to leave the European Union continues to unfold in the global markets, international returns are only marginally down from levels seen a week ago. As developments occur and markets continue to react, you will undoubtedly have questions. We’ve compiled a number of client-approved resources (unless otherwise noted) that you can leverage when having conversations about this unprecedented move and its impact on the markets.