Brexit 10-years on: Taking a long-term view

Geoff Pluck, Head of Stockbroking

On 23 June 2016, the United Kingdom voted to leave the European Union (EU) via the Brexit referendum. The outcomes of the referendum reached, and still continue to reach, far beyond the political sphere.

Political events can often change the course of domestic financial markets, whether that be an election, a budget statement or, in this case, a referendum. While some effects are short-term, others continue for longer and some events, such as Brexit, can become a part of the structural backdrop.

10 years on, let’s take a look at some of the UK companies and sectors that have been impacted by Brexit, both in the immediate aftermath and over the longer term.

What happened to the markets?
Markets famously dislike uncertainty. On the morning of Thursday 23^rd June 2016, the FTSE 100 opened at 6,338.10 points but, by the following Monday, had fallen to 5,982.20 points (5.6%). Of course, this was a short-term shock and the market rebounded quickly – the FTSE 100 had recouped its losses by 29^th June. Furthermore, although markets often price in known events ahead of time, the outcome of the vote shook UK markets nonetheless. The FTSE 250, meanwhile, dropped 13.7% overnight as markets reacted to the referendum result.

The FTSE 250 and firms with a domestic focus were hit harder than the large multi-national focused FTSE 100 (around four fifths of which is based outside the UK) due to their increased exposure to UK markets. A weaker pound and tougher inflationary environment also had an impact.

Which industries were affected?
The financial services and airline sectors were severely impacted due to the potential for regulatory change outside the EU, while the property market was also weak due to uncertainty around demand. Barclays lost 32% by 27^th June before rebounding; International Airlines Group (IAG), which has subsidiaries including British Airways and Aer Lingus, lost 35%; and Berkeley Group, the home construction firm, lost 29% before recovering.



The data in the table above demonstrates the importance of patience and resilience. For example, shares in Barclays fell by 32% in the days immediately after the Brexit vote but, in the 10 years since, its value has increased by 128%. Elsewhere, IAG has been hampered by more recent market events in addition to the referendum, such as the COVID-19 pandemic which impacted international travel yet has recovered overall. In these cases, the effects of these structural market events have been absorbed over time.

A beneficial international focus
The multinationals of the FTSE 100 saw some constituent companies make initial gains following the Brexit vote as they derived most of their earnings in US dollars or other foreign currencies. The significant drop in the value of the pound against the dollar boosted the reported value of these overseas earnings when converted back into sterling.

Some sectors that performed particularly well were mining, including firms such as Glencore which rose by 21% within one month of the referendum and, in the pharmaceutical industry, AstraZeneca which rose by 19%.



While Unilever has made gains of 25% in the years since the Brexit vote, AstraZeneca and Glencore are two names which show that high growth was possible for more international-focused firms.

For long-term investors, periods of volatility require a degree of resilience, alongside a focus on their individual objectives and time horizon. Brexit and other market events show the potential benefits of taking a long-term perspective during uncertain times.

Phil Armitage, Partner and Director of Stockbroking at Redmayne Bentley, discussed long-term investing in our Spring 2026 edition of 1875.

Please note that this communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned. Investments and income arising from them can fall as well as rise in value. Past performance and forecasts are not reliable indicators of future results and performance. The information and views were correct at time of publishing but may have changed at point of reading.