Brexit risks are not priced in by bond markets and Britain’s exit from the European Union could turn more bitter than expected, Anthony Linehan deputy director at Ireland’s debt management agency warned on Wednesday.
“To me (Brexit) is an area that isn’t priced into markets and it can’t be because no one knows what it looks like, even a hard Brexit,” he said, speaking at a conference in London.
“The one thing that worries me is, it’s like a divorce, a hard Brexit could turn very bitter and nasty and the reality of it could be very difficult for financial markets.”
Britain is one of Ireland’s biggest trading partners, and the border between Northern Ireland and the Republic of Ireland is a key issue in Brexit talks.
Linehan said that changes at the European Central Bank and European Commission constitute political risks, alongside Brexit, which he sees as more of a concern than financial risks.
He added that the change of ECB chief will not herald a significant shift in policy stance. Mario Draghi’s term as ECB president expires at the end of October.
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