No-deal Brexit to cause further outflows from UK funds

No-deal Brexit to cause further outflows from UK funds

A total of £19bn has been withdrawn from UK funds since Brexit, and further outflows will happen if the UK exits without a deal, according to the Investment Association (IA).

The prime minister’s latest attempt to get a withdrawal agreement through Parliament was rejected yesterday evening, by a margin of 149 votes.

Chris Cummings, chief executive of the Investment Association, said the outcome was "extremely disappointing" and created prolonged uncertainty as he urged the industry to "implement their long-established no-deal contingency plans".

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He said: "We are now merely weeks away from the Article 50 deadline and it is critical that every effort is made to avoid a no-deal exit from the EU.

"This is by far the least desirable outcome for the millions of people who entrust us with their savings and for our industry.

"Since the Brexit referendum British savers have taken nearly £19bn out of UK equity funds, which reflects broader concerns about the strength of the UK economy.

"A no-deal Brexit will only serve to further dent investors’ confidence in the UK economy, and every effort must be made to avoid it."

Andrew Wilson, chief executive for EMEA at Goldman Sachs Asset Management, said: "Our long-held central expectation has been for the UK to eventually depart the EU and enter into a 'status quo' transition period; this view remains intact.

"However, we recognise that the timeline for such an outcome is fluid, particularly given the EU is unlikely to accept either a time-limit on the Irish backstop or a unilateral UK exit mechanism from the customs arrangements it enforces."