Schroders: Political risk could be ramping up in Europe too

Warning-Sign-Yield-Slow-Stop-Danger-700x450.jpgThere could be “political shocks in Europe” over the coming months following Donald Trump’s election to US president, Schroders’ chief economist Keith Wade warns.

Pre-election opinion polls favoured Democratic presidential candidate Hillary Clinton, masking the potential for protest votes.

“A big theme is the increase in political risk coming up,” Wade says. “The opinion polls have been turned upside down. The Italian referendum is coming up in December and there will be a huge focus on that. There could be political turmoil there.

“There are Dutch, German and French elections in 2017. This result shows there could be political shocks in Europe. There is a lot of dissatisfaction with the status quo. Political risk could be ramping up in Europe too.”

However, Wade adds that the UK may benefit from Trump’s victory in terms of trade agreements.

“European countries will be focusing on their domestic agendas. But they will be taking note. The UK could gain some concessions.

“It may be that the outlook for the City has improved a little by this, ironically. But it depends on trade. If there is fragmentation then that is not a good thing.”