UK bears brunt of Brexit despair
Five years on from the UK’s historic Brexit vote, its economy is lagging behind that of Europe.
The announcement of the vote results were announced on 23 June, 2016, but the country did not officially leave the European Union until 31 January, 2020, due to delayed negotiations between the two parties.
However, those who were hoping that leaving Europe would mean an economic improvement may have been disappointed as the UK had underperformed its European counterpart.
According to FE Analytics, the MSCI United Kingdom index returned 38% over five years to 23 June, 2021, less than half the amount returned by the MSCI Europe ex UK index which had returned 85.1% over the same period.
The UK’s FTSE 100 had returned 41% over the same period while the small and mid-cap focused FTSE 250 had performed better with returns of 61.8%. Meanwhile, Germany’s DAX 30 had returned 70% and the French CAC 40 had returned 95%.
In the five years preceding Brexit, the two indices had traded in line with each other, and the UK had slightly outperformed with the MSCI UK index returning 71% and the MSCI Europe ex UK index returning 69% over five years to 23 June, 2016.
However, the UK was now negotiating trade deals with other countries, including Australia which reached agreement on a free-trade deal in June. This was viewed positively but it was pointed out that currently Australia accounted for just 2% of UK exports and 1% of imports.
AUTHOR
Laura Dew
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