The uncertainty surrounding Brexit is already impacting markets and sterling, but ultimately Europe could come out of it stronger, says Rory Bateman, head of UK and European equities at Schroders.
Bateman says that the impact of the UK leaving the European Union is hard to gauge at the moment, as there is so much uncertainty.
However, he says the uncertainty is already affecting UK markets and sterling prices.
“The uncertainty factor around the imminent referendum is not going to help the UK market,” he says. “There will be uncertainty going into it, and over a period of two years as everything is unravelled there will be a period of further uncertainty.”
If the UK does leave the EU it will “undermine the solidarity of the rest of the EU”, Bateman adds, saying that the EU will have to come back with a strong response.
“I think there will be quite a significant response on the back of that, and there will be several ways of doing that, a more robust European banking union, a deposit scheme backed by the Germans, there are many ways of consolidating and strengthening the core European Union and particularly the Eurozone and I think that will be taken very well by the markets,” says Bateman.
“My sense is that the uncertainty around the markets will be somewhat negative for the UK market and if the UK was pulling out of the EU be negative for Europe, but I actually think there will be quite a rapid response by the EU and that could be beneficial for everyone,” he adds.
Bateman says his team is meeting with companies to understand how they would be affected by any Brexit and will be looking at the implications “in much more detail”.