Skip to main content

Financial conditions as tight as after the Brexit vote

The war in Ukraine has contributed to a tightening in financial conditions that will contribute to weaker GDP growth for the rest of this year and next year. Admittedly, a lot of the initial plunges in UK equity prices and gilt yields have been reversed. But the lasting financial market effects from the war in Ukraine so far appear to be higher commodity prices, higher interest rate expectations and wider corporate bond spreads. That’s why UK financial conditions have tightened to levels similar to those seen after the EU Referendum in 2016. While this will weigh on GDP growth this year and next, the tightening seen so far doesn’t pose a systemic risk.

Become a member to read more

This is premium content that requires an active Capital Economics subscription to view.

Already a member?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to gain:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services


Get access