Out but not Down
Suddenly the world, or at least the United Kingdom, feels like a different place. The ‘out’ verdict in the referendum has cost David Cameron his job and, while yesterday’s developments mean that Theresa May should be appointed prime minister imminently, uncertainty with regard to the timing of the UK’s exit from the EU and the shape of any trade deal with Europe that is put in its place, could well persist for many months. Along with change at the top of the Conservative party, the referendum result looks likely to precipitate a change at the head of the Labour party with Jeremy Corbyn facing a leadership challenge. Like the political backdrop, the economic outlook is now also much less certain. Despite this, stock markets have been fairly resilient. We have taken the opportunity to reduce allocations to equities to ensure portfolios reflect the changed outlook.