Patrick Artus, chief economist, Natixis, has given his verdict on the UK economy’s outlook following the historic vote to leave the EU.
Writing for FTSE Global Markets, Artus notes that market uncertainty around the UK’s future trade relationships will fuel a major downgrading of the economy and the decline of foreign direct investment (FDI) – with UK GDP growth failing from 2.0% to 0.4%.
While discussing the UK’s ability to mitigate this Brexit-induced slump, Artus dismisses the UK’s potential counterstrategies including a deregulation of UK’s financial sector and replacing EU trade with global trade flows. These stimuli – widely cited by Brexiteers as the economy’s most powerful weapons – contradict two important factors: the UK’s domestic appetite for stringent regulatory control of financial markets; and the rapid decline of global trade flows.
For Artus, therefore, it remains unclear how the UK will mitigate the economic effects of a Brexit.
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