Quote by Shishir Baijal, Chairman and Managing Director, Knight Frank (India) Pvt. Ltd. on Brexit:
“The vote to leave the EU increases near term risks facing the UK economy. An interest rate cut by the Bank of England is a strong possibility, as is more quantitative easing. For both residential and commercial property, there will be short-term market volatility. Potentially, and in selective instances, pricing could come under pressure.
One of the first outcomes of the result of the referendum is that the value of the pound and the stock market will fall in the near-term. Since business investment is curtailed, a technical recession is high. Further exporters and financial services firms will be in the forefront of the downturn. In light of the above risks we expect the Bank of England to respond quickly. An interest rate cut of 25 basis points is a strong possibility at the Monetary Policy Committee’s meeting in July, or perhaps earlier if required. We may also see a return of quantitative easing, if there are signs that investment is deteriorating. This we see coinciding with a devaluation of the pound. . The combination of lower prices and devaluation of the pound should draw in Indian investors looking to acquire assets in the UK. London has always been a favourite destination for Indian property buyers and it augurs well for the Indian investors to make their move now.”
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