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JP Morgan's Dimon Sounds More Brexit Alarms

Josh O'Neill

14 July 2017

highlights a gradual rise in confidence about Brexit among institutional investors. 

The firm's Brexometer Index, a quarterly pulse survey of 103 investors, shows that nearly half (45 per cent) anticipate positive global economic growth in the next three to five years, a 13 per cent rise from the figure logged in the last quarter of 2016.

A third, or 33 per cent, think asset holders will increase their risk tolerance over the same period, and there has also been a “modest” increase in appetite for UK assets, State Street says. 

“March 2019 is a quarter closer, but neither the UK election nor the beginning of Brexit negotiations have narrowed down what is likely to happen,” Michael Metcalfe, head of global macro strategy at State Street, said. “If anything the possible outcomes have widened not narrowed. The loss of a Conservative majority in parliament and the need to partner with the Democratic Unionist Party (DUP) has raised hopes of a softer version of Brexit, but at the same time raised the possibility of political deadlock or no deal.”

Arguments have hinged around whether the UK's departure from the EU means it leaves the Single Market entirely - which may happen if the UK ends freedom of movement from EU citizens into the UK - or retains access in a "soft Brexit" that some claim amounts to not actually leaving the EU at all. Defenders of a so-called "hard Brexit" say that fears of a mass exodus of jobs are exaggerated or even plain wrong, arguing that the removal of some EU regulations in a post-Brexit country would make the UK more attractive as a place in which to do business.