Investment Clock insights

ECB waits for Brexit dust to settle


Ian Kernohan

21 July 2016

While we think ‘Brexit’ uncertainty is mainly an issue for the UK economy, there is also bound to be some knock-on impact on the eurozone.  With post-Brexit evidence still patchy, we think the European Central Bank (ECB) will wait until the September meeting before extending its Quantitative Easing (QE) timetable.  

Inflation remains far below the ECB’s target of 2% and while we believe headline inflation will rise later in the year, thanks to the fading impact of a lower oil price, underlying inflationary pressures still remain very low.  Delaying until September will allow an assessment of any Brexit impact to be outlined in the new ECB staff forecasts.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.