The fallout from Brexit is going to be "horrible", according to a leading player in the City of London, and may lead to a recession within a year.
Richard Buxton, chief executive and head of UK equities at Old Mutual Global Investors, which manages £26 billion in funds, defended Mark Carney, Governor of the Bank of England, who was criticised for warning about the dangers of Brexit.
"I don’t think there was doom-mongering, because it is absolutely going to be horrible. Mark Carney’s speech [in which he warned of dangers of Brexit] was absolutely spot on. This is just really bad news," Buxton he said.
“You can criticise the Brexit team for a) an utterly mendacious campaign and b) not expecting that they would really win, so never having a plan. I mean the whole thing is literally unbelievable. It is extraordinary how we have ended up where we are," he said.
While Buxton said that Brexit may not lead to the kind of "short, sharp shock" that followed the 2008 financial crisis, it could have a long term, damaging effect on the UK economy, especially on the share price of companies.
Buxton told the Guardian that the market had already priced in a "pretty significant recession" for the UK with banks and housebuilders particularly badly affected.
"Now I think the economy is going to judder to a halt [or] have a mild recession, but I don’t think it is going to be as severe as some of these shares are pricing in. That said, there is no mad rush to add to or buy into some of those stocks, because the real economy is only going to gradually emerge over the next three to six months," he said.
The Bank of England became embroiled in a bitter row over its independence in the month leading up to the EU referendum.
In a Treasury Select Committee meeting on 24 May, Mr Rees-Mogg accused Mr Carney of being “politically involved” and of bargaining with Chancellor George Osborne on warnings over the economic impact of Brexit.
Mr Carney denied the accusation at the time, stating that there was “no possibility of undue influence coming from the Treasury”.
