In a statement to investors, NAB chief economist Alan Oster noted that after the initial reaction, global equity markets moved back up to their pre-referendum levels, and market volatility is now not only lower than it was prior to the vote, but is “very low by historical standards”.
“Bank lending surveys do not point to much impact of Brexit outside the UK either,” Mr Oster added, although globally, central bank action has “tended to disappoint” those hoping for action to address deflation or slow growth risks.
Monthly business surveys have also remained relatively stable, Mr Oster said, with “July readings not far off those in June, despite a big post-Brexit hit to UK business sentiment”.
“Activity was better maintained in services than in manufacturing in the big advanced economies and the former is by far the biggest sector in these economies,” Mr Oster said.
Nevertheless, the UK is expected to experience a recession, Mr Oster cautioned, which could have a knock-on effect on eurozone economies, following lower demand for European exports.
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