Alberto Gallo, a portfolio manager and head of macro strategies at Algebris Investments, warned the Government for heading towards a “hard Brexit or a very hard Brexit”.
“If they give them an average deal, then other countries will have the possibility of doing the same in the future.”
Mr Gallo outlined four market stresses the UK has to prepare for – the further depreciation of the pound, higher inflation, the need to increase spending and a drop in property prices.
Alberto Gallo said the EU will punish Britain for Brexit
Populism is bad for the same people it's advocated for
He said: ”That hurts people. It hurts, in particular, the middle-and-low wage families that are exactly the ones that voted Brexit.
“Populism is bad for the same people it's advocated for. These are people that have not seen their wages go up in the last decade and now they're going to see the prices of food and other goods going up."
He said higher food prices would squeeze consumption with about 50 per cent of the UK’s food being imported.
Brexit: Results of how the UK voted Mon, March 20, 2017
Much of the North East of the United Kingdom voted to leave the European Union including Sunderland, Gateshead, Darlington, Durham, Hartlepool, Middlesbrough, Stockton, Redcar and Cleveland, North Tyneside and South Tyneside, and Northumberland
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GREAT YARMOUTH: The town of Great Yarmouth on the East Coast of England voted by 72% to leave the European Union.
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Mr Gallo said it was in the EU's interests to give the UK a "bad deal"
Mr Gallo added: ”If you have a very hard Brexit and there is more uncertainty and job losses, then you start having potential property market declines because you have people who lose their jobs, who can't pay their mortgages and so on. That is the worst case scenario.”
He claimed Brexit was already fuelling job losses in the UK.
He added: ”What you're seeing already is banks and other companies already pre-emptively relocating jobs outside of London, outside of the UK.
"There's a lot of uncertainty and there is the impression, we have the impression, there is no real economic and political plan to deal with a post-Brexit UK economy.”