State Street Brexometer
The State Street Brexometer Index is our snapshot of investor sentiment on the impact of Brexit.
Brexometer's results cover the expected impact to operating models, levels of investment into the United Kingdom (UK) economy, prospects for global economic growth and appetite for investment risk.
Here’s what our study found
With the Brexit deadline fast approaching, investors are broadly in agreement that the UK leaving the European Union on October 31 with a deal is the most favourable scenario, with 71% stating that it will have a positive impact on global markets. The results further show that leaving with a deal is viewed as a positive scenario for the value of sterling, with 75% of respondents believing it will increase in value as a result, ahead of being granted an extension (30%) and leaving without a deal (15%).
As the UK and European Union continue to negotiate a deal, investors are currently adopting a defensive position on UK assets, with 57% stating that their holding of UK assets (equities, bonds and alternatives) will stay the same in the next six months. Only 14% expect to increase their holdings of UK assets – with no respondents expecting to increase their holding significantly – while 12% plan to decrease their holdings. This is down from Q1 2019, when 19% of respondents planned to increase their holdings and 22% planned to decrease them.
The share of investors holding a positive medium-term outlook for global economic growth fell to 28.3%, the lowest recording since Brexometer began in November 2016. Despite this negative outlook, the proportion of investors anticipating Brexit having a significant impact on their business operating model fell to a historic low of 11.1%. The overall number of investors expecting Brexit to have an impact on their business also decreased to 71.7%, marginally higher than the record low of 71.6%
in Q3 2017.
Brexometer was carried out in conjunction with PollRight*, and captures the views of 101 professional investors, comprising institutional and alternative investors such as hedge funds, real estate and private equity**.
*PollRight is a market research agency specialising in business-to-business research.
**Regions covered by survey included UK, US, Europe, Central & South America, Middle East, Asia, Africa and Oceania.