Nothing changes immediately in that the UK remains a member of the EU until it triggers the formal exit process, following which it remains a member for at least two years.
The UK faces an extended period of uncertainty, however, as it renegotiates trade agreements, legislation and regulations arising from its membership of the EU. The uncertainty is likely to result in reduced confidence and spending by businesses and, to a lesser extent, consumers. This means growth will be lower in the next two years than previously expected.
The risk is that the whole EU project unwinds but this is highly unlikely given the strength of the political will underlying it. Even if other countries do leave it would happen only over a long period of time. The more likely outcome is that the EU will attempt to strengthen its centralisation and harmonisation, but its ability to do so will be constrained by domestic politics.
The UK has a strong, open and resilient economy, however, and markets will settle down to the new reality after a short period of adjustment. We believe now is the time for a considered, measured approach, maintaining broad diversification in portfolios.