“There is certainly a fear of a slowdown in global economic activity,” says
Professor Fariborz Moshirian, Director of the Institute of Global Finance at UNSW. “However, it is important in Australia we have some perspective, and we have a measured response.”
Pressure has eased on the financial markets after two days of turmoil in the wake of the Brexit vote. However, considerable doubts remain on the future direction of shares and the pound.
“The real issue now is uncertainly, and the markets hate uncertainty,” he says. The problem we may have in this country is that if investors are uncertain of how this will pan out, they may cut back spending. That would impact on the level of employment in Australia. The fallout from this decision will be felt for years to come.”
There is still widespread uncertainty over Britain's vote to leave the European Union as the bloc's leaders prepare to meet in Brussels today.
Professor Moshirian from the UNSW Business School adds “the outcome of the EU Summit on Wednesday will be interesting to note, in the absence of David Cameron. It would be good to know whether the European Commission and the EU Leaders are going to reflect on some of their past policies and directions.”
The UK has lost its top AAA credit rating from ratings agency S&P which said the referendum result could lead to ‘a deterioration of the UK's economic performance, including its large financial services sector’.
“Credit ratings are important, but as the markets around the world take stock today, it would be important to see whether Brexit is going to fast track the process of fuller economic and financial integration with the EU or encourage other member countries to also attempt to leave the EU,” says Professor Moshirian. “That will impact other countries credit ratings.”
He says a go it alone approach in Europe may slow down growth. “The EU as just one trading block could compete better against the rising middle income consumers in Asia and an increasingly interdependent global economy.”
Professor Moshirian is available to discuss the full global economic implications of the UK’s vote to leave the EU.
For further comment call
Fariborz Moshirian on 0425 380 626 or 02 9385 5859, or Email
Media contact: Julian Lorkin: 02 9385 9887 | 0405 805 365 |
AGSM Scholar, Professor, Director of the Institute of Global Finance
School of Banking & Finance