Though the Leave vote hit share values hard, many have recovered. But other sectors of the economy will be counting the cost for years
The overall impact of the historic referendum that saw the UK unexpectedly vote to leave the European Union has so far, in the space of a month, been less severe than some of the more apocalyptic warnings had suggested. But there have been winners and losers across the economy.
Sterling went on a rollercoaster ride on referendum night, ending up down 8% against the dollar as the results confirmed a victory for the Leave camp. Since then, its decline has continued and the pound is now at levels not seen since 1985, having lost about 12% against the US currency. Compared with the euro, the pound has fallen by 9% since the vote and is at a three-year low making holidays in euroland more expensive.
The decline comes as investors worry about weakness in the UK economy and the prospect of interest rate cuts to boost demand. This month the Bank of England left rates on hold but said most members of its monetary policy committee expected a cut in August if the economy did not improve.
The weak pound is a boon to exporters but will make imported goods more expensive. On Thursday, Unilever the business behind brands including Dove, Flora, Bertolli, Hellmans and Persil became the first major food and consumer goods company to warn that companies were likely to pass on increased costs to customers.
Markets were caught by surprise by the Leave result and a record $2tn was wiped off the value of global shares. But since then, there has been something of a recovery, particularly for the FTSE 100, which has regained all lost ground and more, and is currently at 11-month highs. However, the leading UK index is chock-full of companies with international operations, which are less exposed to any slump in the UK economy, and which earn in dollars, thus gaining from the new lower exchange rate.
The weak pound has also raised the prospect of UK-listed companies being snapped up by foreign rivals because suddenly they look cheap. Just last week chip designer ARM agreed to be taken over by Japans SoftBank for 24bn, while South African retailer Steinhoff has agreed to buy Poundland. Analysts believe more deals will follow.
Markets have also been lifted by bargain hunters who believed valuations had fallen too far, as well as by the quick resolution to the political crisis threatening to engulf the government following Theresa Mays appointment as prime minister.
However, the mid-cap FTSE 250, which is more exposed to the UK economy than the 100 index, has yet to reach the level it was sitting at before the referendum result, despite recovering more than 13% from its lows. It is now down 2% from its pre-Brexit level.
There has been a spate of profit warnings from estate agents, and many are making gloomy forecasts for the rest of the year. Agents in some upmarket parts of London have reported a bounce in interest from overseas buyers keen to take advantage of weak sterling, but for the mainstream market there are signs both interest and price growth have cooled.
On Friday, LSL, Britains second-biggest estate agent group owner of Your Move and Marsh & Parsons among others said business had slowed since the vote and warned that its annual profits would be significantly lower than anticipated. London-focused Foxtons issued a similar warning in late June.
Forecasts for the rest of the year are for falling interest from buyers and price drops, particularly in the most expensive parts of the market. French bank Socit Gnrale said last week that a price correction of even 40-50% in the most expensive London boroughs could be possible.
The Royal Institution of Chartered Surveyors (Rics) says its members expect sales to slump over the summer, because buyer inquiries fell significantly in June. Ricss findings were cited by the Bank of England when it announced that it was revising down its forecast for price rises.
Shares in housebuilders lost around 40% of their value in the immediate aftermath of the Brexit vote, with investors worried that an economic slowdown in the UK would hit their business, despite the country seeing record low interest rates.
There has been some recovery since then, but the companies have failed to regain all their losses. Barratt Developments, Britains biggest housebuilder, is still down around 28%, and it has said that it may build fewer homes because of the current uncertainty.
Even before the vote, upmarket rival Berkeley had warned in June of a 20% drop in reservations of new homes.