"Non-event" or are we "embarking in a canoe down a very windy and dangerous set of rapids"?

​Here’s a look at how some of the City’s biggest investors are reacting to Theresa May triggering Article 50.

Saker Nusseibeh, chief executive of Hermes Investment

“One of the main flaws of this entire process, indulged in by both sides, is to talk as if the effects of Brexit would be instantaneous or clear-cut once it is triggered. To restate the obvious, Brexit is a long, complicated and arduous set of negotiations, of which the commercial outcomes and their long-term effects on the economy are unlikely to be clear for many years to come.

“The most immediate effect of the Brexit vote (a 20% devaluation of our currency) was not about the outcome of Brexit per se, but merely a logical hike in the risk premium for UK assets while we wait to see whether the effects of whatever can be negotiated are good or bad for the country in the long term. Triggering Article 50 can therefore be likened to embarking in a raft or canoe down a very windy and dangerous set of rapids. All we know at present is that the journey is long, the path of the rapids will likely take unusual twists and turns, and that the ride will be turbulent.”

Keith Wade, chief economist at Schroders

“If Brexit negotiations are quite difficult then we could see bouts of weakness in the pound, and that would possibly provide further support for the market’s overseas earners. The bigger issue is whether, in the event of political disruption, for example, there was a loss of confidence in the UK and sterling.

“If we were to see repeated falls in the pound feed through into wages and price expectations then the Bank of England would have to tighten and I think that would create a very difficult situation for markets in the UK, particularly the bond markets.”

Steven Andrew, a manager at M&G

“The negotiations around the withdrawal of the UK from the European Union have the potential to be the most significant structural change to the UK's economy in a generation. Then again, the economic impact might be so small, we may not even notice. The degree of clarity around these issues is very likely to stay murky for some years yet, so rushing to judgement either way – from an investor's perspective – is not a good idea.”

Portfolio managers at Invesco Perpetual

"Britain’s pre-announced, long-anticipated decision to trigger Article 50 and formally start the Brexit process has come as a surprise to nobody. Judging by the market’s reaction so far, it has been a non-event.

"The focus now shifts to the negotiation phase. Over the next two years, observers and market participants will be searching for hints and looking for clues about the nature of the relationship between the UK and the European Union (EU).

"Markets do not like uncertainty, so some volatility could be expected on either side of the Channel during negotiations, as contentious topics are tackled.

"The views we held at the time of the referendum result last year remain true today."

Nancy Curtin, chief investment officer at Close Brothers Asset Management

“While the Prime Minister faces the tall order of negotiating the best possible result for the UK on critical issues like passporting and export tariffs, she does have a surprisingly strong economy at home, and a promising backdrop of global growth to provide a base layer of comfort for now.

“The fall in sterling since the Brexit vote provided a boost to the value of UK large-caps, given the largely international makeup of the FTSE 100. However, it is also bringing some economic upside, stimulating a much awaited rebalancing of the economy, as exporters and manufacturers benefit from the cheaper pound. And, for the most part, we are yet to see the negative effects of Brexit many touted as inevitable, such as the movement of major company headquarters or a plunge in consumer confidence."

Salman Ahmed, chief investment strategist at Lombard Odier Investment Managers

“Investors should be mindful that from this point onwards there will be less smoke and mirrors and an immediate reduction of uncertainty surrounding Brexit. Going forward the UK and EU will need to be clearer on what they want and where compromises will occur.

“Investors should be braced for some Sterling volatility but in my opinion it will remain range bound over the next few months. Article 50 has been largely priced into the pound as reflected in extreme shorting positioning and I believe that any negative impact from negotiation noise will be offset by the Bank of England’s hawkishness as inflation rises further.

“Looking ahead, initiation of the Brexit process indicates the reconfiguration of the EU has started. The bigger question remaining for me is whether the EU chooses to take the role of conciliatory or confrontation as talks progress.”

Jake Robbins, a manager at Premier Asset Management

“The triggering of Article 50 has been well flagged and as such should have a fairly limited impact on financial markets in the short term. However, volatility is likely to increase in response from both camps as negotiations progress.