Key points:

• The UK is expected to enter a shallow recession post Brexit.

• Direct implications of this for the world economy aren’t large.

• However, spillovers to other countries or regions could lead to a more significant impact on the world economy. The most obvious concern is Europe,whose share markets have already been hit hard.

In our latest global forecast update we revised down our United Kingdom (UK) year-average GDP growth forecasts in the wake of the UK vote to leave the European Union (EU) – so called Brexit. We expect to see a shallow technical recession in the UK around the turn of the year.

In this note we look at what such a slowdown might mean for growth in the rest of the world.

The main finding is that, by itself, a UK slowdown has relatively little impact on global growth. The main risk to global growth comes from the extent to which financial market disruptions and uncertainty also impact other countries, in particular the rest of Europe.

See the full report for details:

• Brexit and World growth (PDF, 417kb)

More from NAB: 

• Global & Australian Forecasts: July 2016