Sectors and companies in the UK where large amounts of people are employed would be most at risk in a no-deal Brexit scenario, Azad Zangana senior European economist and strategist at Schroders has warned.
If the UK leaves Europe without a deal it is expected that there will be a sharp depreciation of sterling against the dollar, the euro and most currencies.
Mr Zangana said: “We would suggest for any sector that employs a lot of people and a large part of their costs are related to wages, that would certainly be an area in trouble."
The retail sector is another area that would struggle, where a large proportion of goods are imported from the rest of the word.
Mr Zangana added: “They will see a cost squeeze, and they may not be able to pass on these costs to end users, their customers, and if that is the case, they could see themselves get into trouble.”
Mr Zangana also warned the situation could even be as bad as some of the worst case scenarios the Bank of England is modelling: for example, the pound falling below parity against the Dollar.
He added: “If you are a stock market owner then you have to think about the exposure of companies to that; however if you are focused on domestic assets then you might be more worried about how the economy might perform.
Saying that, the UK economy is not as important to the UK stock market as many might think, Mr Zangana added.
The largest components of the large cap index - the FTSE 100 - are mostly international stocks, making money overseas.
However, there are UK banks and other companies that would be impacted by a UK recession.
And in the wider stock market, smaller companies will have a bigger exposure.
He added: “If you were to move to the FTSE350 and the small caps index, they are more exposed to the UK economy. We would be concerned for the housing market and builders, who have a high exposure to that sector.
“The banking sector would be in trouble if house prices fell. The retail sector will also struggle with a weakness in the pound.
“One one hand, large caps stocks will be fine, but it does not mean you will be totally immune from a no deal outcome as an investor, if you are just holding equities.”