Skip to main content

Global jitters aggravated by no deal fears

The global shift away from risky assets and towards safer ones that seems to be underway will either be exacerbated by a no deal Brexit on 31st October or cushioned by a deal or a delay. Although a lot of bad news has already been priced into UK gilt yields and the pound, if a no deal Brexit became a reality we suspect the 10-year yield would drop to a new record low of 0.25% and the pound would fall to $1.15. But if we are right in thinking that the Bank of England would raise interest rates next year if there were a Brexit deal or more delays, there may be more upside to gilts yields and the pound than is widely perceived. A slump in global equity prices will probably mean that the FTSE 100 falls sharply this year either way.

Become a client to read more

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

Already have an account?

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