The Economic Effects of Brexit - Evidence from the Stock Market

Holger Breinlichy, Elsa Leromain, Dennis Novy, Thomas Sampson and Ahmed Usman
Additional contact information
Holger Breinlichy: University of Surrey, CEP and CEPR
Elsa Leromain: London School of Economics
Ahmed Usman: University of Nottingham

No 918, School of Economics Discussion Papers from School of Economics, University of Surrey

Abstract: We study stock market reactions to the Brexit referendum on 23 June 2016 in order to assess investors’ expectations about the effects of leaving the European Union on the UK economy. Our results suggest that initial stock price movements were driven by fears of a cyclical downturn and by the sterling depreciation following the referendum. We also find tentative evidence that market reactions to two subsequent speeches by Theresa May (her Conservative Party conference and Lancaster House speeches) were more closely correlated with potential changes to tariffs and non-tariff barriers on UK-EU trade, indicating that investors may have updated their expectations in light of the possibility of a ‘hard Brexit’. We do not find a correlation between the share of EU migrants in different industries and stock market returns.

JEL-codes: F15 F23 G14 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2018-08
New Economics Papers: this item is included in nep-eec
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Citations: View citations in EconPapers (45)

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https://repec.som.surrey.ac.uk/2018/DP09-18.pdf (application/pdf)

Related works:
Journal Article: The Economic Effects of Brexit: Evidence from the Stock Market (2018)
Working Paper: The economic effects of Brexit - evidence from the stock market (2018)
Working Paper: The Economic Effects of Brexit - Evidence from the Stock Market (2018)
Working Paper: The Economic E¤ects of Brexit - Evidence from the Stock Market (2018)
Working Paper: The Economic Effects of Brexit - Evidence from the Stock Market (2018)
Working Paper: The economic effects of Brexit - evidence from the stock market (2018)
Working Paper: The economic effects of Brexit- evidence from the stock market (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:sur:surrec:0918

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