Brexit will lead to low interest rates and few bright spots for Norway

EU flagEU flag.Photo Norway Today Media

Low interest rates and weak economic growth for a long time may be the consequences for Norway of a possible British withdrawal from the EU,  analysts say.

– There will be no acute stock market crashes like in 2008. Immediately there will probably be a lot of turmoil with decreasing equity prices and turmoil in credit markets. The value pound will perhaps drop to excactly 10 kroner. This will probably mean cheaper London tours at Christmas, Jan Ludvig Andreassen, chief economist at the Oak Group, told the newspaper Dagbladet.

He believes the long term effects of a so-called Brexit would be the most serious.
– The world is becoming more uncertain and the EU could unravel. I think there will be a protracted period of lower economic growth and uncertain times, says Andreassen.
He does not believe trade between Norway and the UK will be particularly affected by an EU withdrawal, but believes the effects for the financial market could be significant.

He envisions that low market interest rates may reflect expectations of a prolonged weak economic growth, which could lead to the returns of the pension savings for private households weakening. He also points to a situation where it may be impossible or very costly for companies to make new loans.

Source: NTB scanpix / Norway Today

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