Neil Woodford: Brexit won’t ‘significantly’ change the UK and global economy

Neil WoodfordStar fund manager Neil Woodford has reassured investors Brexit will not “significantly” influence the path of the UK and world economy.

In a blog post Woodford says: “The trajectory of the UK economy, and more importantly the world economy, will not be influenced significantly by today’s outcome. Britain’s long-term economic future would be largely unaffected by a decision to leave the European Union.”

The fund manager says the global economic backdrop will continue to be challenging, regardless of the UK’s membership of the EU.

He says: “Many of the greatest economic challenges that we face now and in the future, in my view, dwarf the economic issues associated with today’s outcome.”

Nevertheless, in the near-term Woodford believes UK GDP will be lower over the next 18 months than if the UK had voted to remain.

But he says nominal GDP could slightly change as inflation be will temporarily higher following the fall in the pound.

He says: “Growth in consumer cashflow will be marginally lower, principally because fuel prices will be higher but of course exporters will enjoy something of a windfall.”

He says his portfolio strategy will not change as a result of Brexit.

Woodford says: “[My portfolio] was designed for a challenging world, characterised by low growth, deflation, debt problems, weak productivity and troubling demographics. Despite these headwinds, I remain confident that the portfolio will deliver the returns we have targeted over the three-to-five year time horizon that we continue to focus on.”