For investors, that translates into the potential of a long headache and accompanying market volatility that will make decisions on where to put money treacherous.
“We’re going to be more sick of talking about the Brexit than we were about the Fed move,” said JJ Kinahan, chief strategist at T.D. Ameritrade.
A simple divorce from the EU is designed to happen in two years, once the article that addresses breakups is invoked. But with the interconnected and complicated nature of trade deals and other binding agreements in play, the process of Britain completely shedding itself of EU-related obligations could last a decade.
Markets were in a state of extreme disruption following Thursday’s Brexit referendum, in which the move to leave pulled 52 percent of the vote to 48 percent for the remain side. U.S. stock indexes dropped more than 2 percent, and the damage was considerably worse in Europe and Asia.
“I suspect this will take perhaps as long as seven to 10 years for Britain to fully extract itself from the European Union,” said Fergus McCormick, head of the global sovereign ratings group at research and ratings firm DBRS. “In the short term, the degree of uncertainty is extremely high. I’m not at all surprised by the reaction of the market.”