Brexit stress tests show markets are reacting negatively to the conservative leadership election, according to a leading economist.
Joe Brusuelas, RSM’s chief economist based in the US, said the firm has constructed a Brexit Stress index that “points to an increase in stress over the past few weeks as the Tory leadership contest heats up”.
And he anticipated a “noticeable increase” should the proponents of a hard Brexit look to take control of the race.
Mr Brusuelas was speaking ahead of his visit to the UK next week where he will be talking at an event in Aberdeen co-hosted by RSM and The Press and Journal.
He and his colleague Simon Hart, Brexit lead partner, will address an audience at the Chester Hotel on how to better ready yourself for the turbulent economic and global changes ahead.
Mr Brusuelas said: “We plan to address the risks around the synchronised global economic slowdown and the economic and financial risks around Brexit.
“Timing is everything and a late October Brexit into a slowing global economy presents a different set of risks than that which is generally being discussed.”
He said they were hoping to urge businesses to focus on the following business considerations.
He said: “First, stress test one’s balance sheet to ensure adequate liquidity should a greater than anticipated external shock hit the business.
“Second, firms should tend to ensuring adequate banking and FX management, making sure all licences and intellectual property protections are up to date and look for alternative supply chain options.
“Third, pay close attention to the macroeconomic and political environment over in the EU. Brexit is not a top tier concern and the Europeans may react in a different manner than that which is discussed in the British press.
“Fourth, look to engage in a bottom up review that focuses on productivity and efficiencies.”
Andrew Forsyth, office managing partner for RSM in Aberdeen, added: “The impact of Brexit will be felt in Aberdeen.
“But due to the global nature of business, macro factors such as the price of oil and global economic deceleration play an important role in future prosperity for the city.
“The event, on June 26, provides the perfect forum to discuss issues impacting businesses in Aberdeen from a UK, European and global perspective.”
For information and to book tickets, click here.
