The vote may mean a short-term slowdown in UK infrastructure investment, according to Andrew Jones, head of infrastructure debt at AMP Capital, who warned that currency fluctuations would have a big impact on the sector.
While domestic assets should be 鈥渟ufficiently resilient to weather the storm鈥�, transport projects 鈥� as well as energy projects 鈥渕aterially dependent on surrounding nations and interconnections鈥� 鈥� are more at risk.
Energy prices are, he said, are likely to go up, given that the UK is dependent on power imports.
He pointed out that the UK was increasingly reliant on imports from and through Continental Europe, that its energy market was deeply integrated with Europe鈥檚 and that a material share of the UK鈥檚 electricity was exchanged with EU partners.
He also argued that the energy market could not practicably be separated from Europe鈥檚 energy networks, adding that the UK would have to continue to adhere to EU energy policy to some extent 鈥� yet without having any influence over policy.
鈥淲e would anticipate that investment into the energy sector is likely to decrease in the UK in the short term, but the effect would be much less pronounced than in other sectors,鈥� Jones said.
鈥淢ore aggressive players will be looking to take advantage of electricity price volatility and expected longer-term increases, so we may see the energy sector rally in the medium term.鈥�
The vast majority of UK renewable energy projects have some degree of energy price exposure and would benefit directly from an increase in electricity prices, he said.
