Neil Woodford, Britain’s top investor, says the long-term prospects of the British and global economy are unaffected by Britain’s vote to leave the European Union.

Heavy declines in stock markets and currency markets in the wake of the vote still see the FTSE 100 trading at a higher level than when the decision to hold a referendum was made in February, Woodford says.

Sterling trades around eight cents lower against the dollar than in February and buys $1.3578.

Markets shocked

‘Markets are clearly shocked by the decision but, in our view, it is not as negative a development as the market’s initial reaction appears to imply,’ Woodford says.

Woodford accepts British GDP growth will come under pressure over the next 18 months or so.

‘But, because inflation will (temporarily) be higher following the fall in the pound, nominal GDP could well be little changed,’ Woodford adds.

‘Growth in consumer cash flow will be marginally lower, principally because fuel prices will be higher but of course exporters will enjoy something of a windfall.

‘In the longer term, it is my view that the trajectory of the UK economy, and more importantly the world economy, will not be influenced significantly by today’s outcome.

Economic headwinds

‘Consequently, the portfolio strategy will not change. It was designed for a challenging world, characterised by low growth, deflation, debt problems, weak productivity and troubling demographics.

‘Despite these headwinds, I remain confident that the portfolio will deliver the returns we have targeted over the three-to-five year time horizon that we continue to focus on.’

The CF Woodford Equity Income Fund is down 2.8% year-to-date and delivered a gain of 15.9% in 2015.

Woodford Patient Capital Trust (WPCT), a specialist pharmaceuticals and technology investment trust managed by Woodford, declined 7.8% to 87p.

Issue Date: 24 Jun 2016