Brexit unlikely to be a Lehman's moment

The surprise United Kingdom referendum for Brexit caught markets on the hop. Although some of the initial falls in markets have already been trimmed, market reaction since the referendum is a continuation of the pattern seen in the weeks leading up to the vote, when markets gyrated in line with the shifting fortunes of the "Remain" and "Leave" campaigns.

In our (Oxford Economics) view, these market swings are hard to square with any likely impact on the UK economy from Brexit. The UK accounts for only 3.5 percent of world output, and studies (including our own) looking at the economic impact of Brexit in the UK are mostly arguing about a few percent plus or minus on GDP in the long term.

Market gyrations after the vote encompassed currencies, bank shares and bond markets - in particular, bond spreads in some of the fiscally weaker eurozone states widened notably.