Post-Brexit slowdown fears hit holiday firms, builders and airlines

Mon Jun 27, 2016 10:39am EDT
 
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By Paul Sandle

LONDON (Reuters) - Airlines, holiday companies and housebuilders joined British banks in bearing the brunt of Brexit-induced market turmoil on Monday, which analysts said reflected expectations Britain was headed for recession following its vote to leave the EU.

The FTSE 250 index .FTMC, which is more closely aligned to the British economy than the multi-national heavy FTSE 100 .FTSE, was down 12.8 percent in the two days of trading since Thursday's vote.

The FTSE 100 was down 5.2 percent, while sterling tumbled to a fresh 31-year low against the dollar and British 10-year government borrowing costs sank below 1 percent for the first time, as investors seek a respite from turbulent markets.

"UK lead indicators are already consistent with a recession and will likely now worsen," Credit Suisse European equity strategist Andrew Garthwaite said.

Globally the vote wiped $2.08 trillion off equity markets on Friday, the biggest daily loss ever.

British employers' group the Institute of Directors reported that a quarter of its members would put a freeze on recruitment and 5 percent would make redundancies.

Its snap reaction survey of 1,092 members also found 22 percent of companies were considering moving some of their operations outside the United Kingdom, whereas only 1 percent said they would bring operations back.

"A majority of business leaders think the vote for Brexit is bad for them, and as a result plans for investment and hiring are being put on hold or scaled back." IoD Director General Simon Walker said.   Continued...

 
Easyjet counters are seen at Nice Cote D'Azur international airport Terminal 2 in Nice, France, May 4, 2016. REUTERS/Eric Gaillard/File Photo