After the initial shock sell-off after the referendum result on Friday 24 June, markets staged a remarkable recovery. Initially, large cap, defensive, overseas earners led the way. As we progressed through July, early evidence suggested that the UK economy was not coming to a shuddering halt. The UK consumer seemed in fine fettle, continuing to buy new cars and visiting show homes. One area that did see softening demand was overseas holidays, impacted by July’s ongoing terrorist attacks on the Continent and rising costs due to sterling’s fall in value. As a result, more domestically oriented mid- and small-cap companies bounced back; in July, the FTSE Small Cap Index was up 6.8 per cent and the FTSE 250 Index +6.42 per cent, both nicely ahead of the +3.4 per cent return from the FTSE 100.
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