The Impact of Government Policy Responses to the COVID-19 Pandemic and Brexit on the UK Financial Market: A Behavioural Perspective

Audrey Paterson, Rilwan Sakariyahu* (Corresponding Author), Rodiat Lawal, Adedoya Alabi

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)


At the height of the COVID-19 pandemic in the United Kingdom, the Governor of the Bank of England, while granting an interview, described the pandemic as an unprecedented economic emergency and said that the Bank could go as far as radical money printing operations. In reaction, the UK financial market, particularly the FTSE 100 and pound sterling, witnessed record-breaking losses. Considering this evidence, we hypothesized that the emotions and moods of investors towards the financial market might have been impacted by the information they obtained from frequent government policy announcements. Furthermore, we proposed that the United Kingdom’s final exit from the
European Union (Brexit), which coincided with the pandemic, could have worsened the outlook of the UK financial market, as investors began to diversify their portfolios. Consequently, we examined the impact of government’s policy announcements on investors’ reactions to the concurrence of the COVID-19 pandemic and Brexit. Our findings reveal that the psychology of investors during the pandemic was significantly shaped by frequent policy announcements, which in turn affected overall market behaviour.
Original languageEnglish
Number of pages20
JournalBritish Journal of Management
Early online date5 Jan 2023
Publication statusE-pub ahead of print - 5 Jan 2023

Bibliographical note

We are most grateful to the Editor-in-Chief, Associate Editor Prof Sofia Johan and the anonymous reviewers for their constructive comments, which have significantly improved the quality of this paper. Any errors that remain are the authors' responsibility. We wish to thank Abdullah Yusuf, software engineer at Bloomberg LP, USA for aiding with data collection and providing the Python codes for analysis, as well as other helpful suggestions.

Data Availability Statement

The data that support the findings of this study are available from the corresponding author upon reasonable request

Additional supporting information can be found online in the Supporting Information section at the end of the article.


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