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    Brexit to Hit UK Harder Than EU, Market Reaction Likely to Be Muted Anyway

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    Britain and EU After Brexit (61)
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    Brexit will have bigger influence on UK economy than on the euro area but previous experience shows that the market reaction is likely to be muted anyway, European Central Bank (ECB) President Mario Draghi said.

    MOSCOW (Sputnik) — On June 23, the majority of the UK electorate voted to leave the European Union, which caused general uncertainty among the industry and business sectors of the country.

    "The impact [of Brexit] of course is going to be stronger on the UK than it is on the EU and on the euro area, but certainly the UK is a large economy, so it will have an effect here too," Draghi told El Pais newspaper in an interview.

    He added that previous experience with Brexit and the US presidential elections showed that "in the short-term the response to these uncertainties has been more muted than people expected.

    "We’ve seen markets reacting quite strongly in the immediate aftermath, but then they’ve recovered to the pre-event level."

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    Britain and EU After Brexit (61)

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    • Jonathan Ferguson
      There will be a substantial initial shock. How well the UK recovers depends a lot on policies. Market Darwinism and austerity will likely prove counterproductive if applied to this raw wound. UK will need a healing balm, not salt and lemon juice.
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