The Effects of Brexit on The UK Capital Markets

Abstract

On the verge of the Brexit referendum in this paper we intend to identify the consequences that this event has created over the United Kingdom's capital markets. By reviewing the available studies done until now on this topic and the financial literature about the constant changes over the market we will try to analyze the impacts of the British citizens’ decision to leave the European Union on the capital market during the transition period.

To conduct this study we will extract real-time data sets released from financial institutions to examine the changes in levels and values of Stock Exchange. Our main aim and focus are on analysing the volatility and market changes as a result of unexpected and new ongoing events. Hence we will study the values of Abnormal Returns and their relevant statistical information derived from the political situation and policy uncertainties in the country. In general, it has been found that Brexit has created negative consequences over the market throughout our examination period.