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"Britain's economy may be in recession over the next year. In addition, the GDP growth in each of the next five years will be at least 0.5 percentage points below and the main reason is the unexpected decision of the British to leave the European Union.
"Our baseline scenario assumes that the UK economy will shrink and also, we expect a significant decline in investment in the country, taking into account the strengthening of political and economic uncertainty after Brexit." - Said Richard Turnill, chief investment strategist at BlackRock.
Turnill and his colleagues expect that this week the Bank of England will cut interest rates to zero from the current record low of 0.5 percent, and in August will expand its quantitative easing program. "The market is not fully pricing in such developments, - said Scott Tief, Head of BlackRock Global bonds -. This means that the pound will fall further, though not to parity against the dollar."
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