It’s early days but we see no reason to change our view that the global economic fallout from the UK referendum result should be minimal. The UKrecovery will probably falter due to heightened uncertainty about the country's future relations with the EU27, but a more competitive exchange rate along with additional policy support will cushion the blow. Spillovers to the rest of Europe should be fairly limited and the impact further afield will be negligible exceptthat expected interest rates have fallen. It is no surprise, therefore, that equity and commodity markets have, so far, taken the referendum result in their stride. In the coming months, the focus is once again likely to turn to China and, particularly, the Fed, which we expect to raise rates by year-end.
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