The risk of a global recession is now more than 50% after Britain voted to leave the European Union, according to asset manager T. Rowe Price Group, which oversees more than $765 billion in assets.
“Those who believe Brexit is a UK problem are misunderstanding the impact it will have globally. They’re forgetting the impact that Greece had – and Greece is much smaller than the UK and not a financial center,” said Arif Husain, head of international fixed income at T. Rowe Price in e-mailed comments. “The vote to leave could result in a global recession.”
The UK’s vote to quit the EU after more than four decades has sent shock waves throughout global markets and caused the pound to plunge to the lowest level since 1985. Just after 6am London time, as most votes were counted, the BBC said there was no way back for the pro-EU side, with voters having backed “Leave” by 52% to 48%.
“For investors, the money was to be made in the run-up to the referendum from all the volatility that was occurring,” said Husain. “It will be harder to make money now.”
© 2016 Bloomberg