Financial services experts have urged the Government to act rationally in the wake of the world’s first “DIY recession” after 52 per cent of voted to leave the EU.
The vote ends the UK’s 43-year membership of the EU and has seen the pound plummet to a 30-year low.
Old Mutual Global Investors chief executive Richard Buxton agrees with the view the UK will now enter a recession.
He says: “The biggest sadness of today is that it is reasonable to assume that the UK will quickly enter a period of economic recession, the key reason why we believed the outcome would be different from what has materialised today. It is, in effect, likely to be the first ever 'DIY recession', as George Osborne prophetically called it."
Buxton adds: “It is hard not to feel disappointed at this result, which we know is likely to result in a difficult period for UK equity investors. As ever, we will do everything in our power to help our clients to navigate these market conditions; any investment decisions we take will be made with careful consideration.”
The Investment Association says: "The focus in the short-term will be on how markets respond, but it is important that we adopt a collective long-term focus on how the UK can preserve the pre-eminence of its financial services sector including our highly successful £5.5trn asset management industry - the second largest industry of its kind in the world.”
Chelsea Financial Services managing director Darius McDermott says the Bank of England's reaction will be "crucial".
He says: “Markets will now look to our politicians to see how they will deal with the situation – what plans they have to make this work. Also crucial will be the Bank of England's response to huge moves in the pound. We don’t want knee-jerk reactions from parliament. What we actually need is for our leaders to be sensible, rational and show us some stability."