The global anger vote will have lasting effects on politics and, with it, the long-term economic outlook. It is reshaping government policies, forcing the mainstream political parties to turn away from globalisation and embrace “New Populism”. Fiscal and monetary policies will merge as low interest rates and high levels of debt make the latter impotent. This backdrop will prove counter-productive, dampening the recovery in productivity and pushing already low growth rates even lower. This is bad for long-term financial assets and equities. It is also bad news for EMs, which depend on globalisation to converge economically with rich countries, as well as commodities and energy. However, in a world of rapidly debasing fiat currencies gold can only shine.

Sentiment towards Poland has been tarnished by the more populist mutterings of the PiS government. But Poland remains a highly competitive economy. Productivity growth may have dipped but remains well above EU-15 levels. That will continue to drive convergence in living standards and GDP growth overall. The zloty looks cheap. Local bonds offer a decent yield pick up on an unhedged (which we would be) basis, even after factoring in ratings risk. Equities have performed badly, and are likely to continue to lag until the foreign currency mortgage conversion issue is settled. But Ex-financials they already look attractive.

The post-Brexit Conservative government in the UK under Theresa May has a clear run in negotiating with the EU over exit terms. The opposition Labour Party is in total disarray and is probably electorally doomed for a decade. That removes one element of risk for UK assets. But there is little sign that the May government will firmly tackle the underlying structural problems of the UK economy: woeful productivity growth; poor business development and over-pressed infrastructure. So we expect sterling to stay weak over the medium term.