A survey of global investors by Barclays lays bare the depth of market pessimism as the U.K. starts divorce talks with the European Union.
Torturous, drawn-out negotiations with the EU that “involve a series of delays” is the likeliest scenario foreseen by the majority of the 642 respondents, Barclays strategist Sreekala Kochugovindan wrote in a report accompanying the release of the survey on Monday. That “may in turn weigh on market sentiment,” she said.
About 64% are skeptical the exit will be orderly and expect protracted discussions to sap the value of U.K. assets, in particular the pound. Its sharp drop since the Brexit vote has cheapened the real effective exchange rate to near an historic low, and investors don't foresee a recovery to pre-referendum levels.
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