Brexit will slow UK growth by 1 percent, claims Munich Re

Growth in the UK economy will be around one percentage point lower until 2018 because of its decision to leave the EU, Michael Menhart, chief economist at Munich Re, the world’s largest reinsurer has said.

He described the move as a major blow for the EU and one which will have severe implications for the economy – particularly that of the UK. He said the move would likely delay a return to a more normal interest-rate environment.

“Annual growth in the UK will probably be around one percentage point lower until 2018. Economic growth in the EU will also suffer, although to a lesser extent.

“One effect on long-term investors in particular, such as insurance companies, will be as follows: The US Federal Reserve might now hold off from raising interest rates in the near future, thus delaying the return to a more normal interest-rate environment.

“The referendum decision is not likely to impact the insurance industry as heavily as other sectors. London will lose influence as a financial centre to hubs such as Singapore or New York, and this will also affect insurers.”