TORONTO – Comments from financial analysts and politicians on the economic ramifications of the Brexit vote:
“The Brexit result is a net negative for the global growth outlook, but it’s not a crippling blow. The initial financial market reaction was especially sour mostly because the market had become so convinced that Remain would win and not so much because it’s a massive negative for the outlook.” Douglas Porter, BMO Capital Markets chief economist.
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“Given the economic uncertainty, it is difficult to see how the U.K. economy will avoid a recession.” Benjamin Tal, deputy chief economist at CIBC World Markets Inc.
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“For now, the most immediate impact will be lower interest rates… The Bank of Canada will wait and see what happens… If anything, continued very low interest rates could further boost already hot Toronto and Vancouver housing markets.” Sherry Cooper, chief economist at Dominion Lending Centres.
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“In the longer term, the key issue for investors is whether Brexit marks a turn toward nationalism… Equity investors particularly have benefited from globalization over many decades as companies have been able to move production to lower-cost jurisdictions and penetrate new markets, providing a significant long-term tailwind to earnings. A move in the other direction would exacerbate the challenges we have been highlighting for some time, including the persistent low-growth environment that is firmly in place today.” Bruce Cooper, TD Asset Management chief investment officer.
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“As in the aftermath of an earthquake, we may see significant aftershocks rock the markets in the coming days, but it appears the worst has passed for now.” Colin Cieszynski, chief market strategist at CMC Markets Canada.
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“In Canada, the economic impact should be relatively minimal and will have more to do with uncertainty and loss of confidence.” The Conference Board of Canada.
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“We recognize that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. G7 central banks have taken steps to ensure adequate liquidity and to support the functioning of markets. We stand ready to use the established liquidity instruments to that end. We will continue to consult closely on market movements and financial stability and co-operate as appropriate.” G7 finance ministers and central bank governors.
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“Canada has tremendous economic fundamentals that we are strengthening with key investments in infrastructure and measures to grow our middle class. We are well positioned to weather global market uncertainty as we have done in the past.” Prime Minister Justin Trudeau.
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“The Liberal government must also continue to fight for the ratification of the Canada-EU free-trade agreement the previous government reached. This significant trade agreement can generate new jobs and new customers for Canadian goods and services and the Liberal government must show leadership to ensure it does not become a casualty of a period of uncertainty in Europe.” Rona Ambrose, interim leader of the federal Conservative party and leader of the Opposition.
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