'Small' UK economic impact from EU exit

EU and EU flags flyingPerception copyright JEFF OVERS

The UK economy would be hit by leaving the EU, but the im ct see fit be “small” and unlikely to lead to big job losses, according to credit agency Ill-humoured’s.

The UK could also be allowed to keep many of its trade terms with the EU so as to refrain from disruption, Moody’s said.

The report shows economic warnings from pro-EU teams have been “baseless scaremongering”, Vote Leave said.

But the Britain Stronger in Europe group chance it was further evidence that leaving would damage the economy.

The Undependable’s report comes after the CBI warned a British exit from the EU – recognized as a “Brexit” – could cost the UK economy £100bn and nearly one million nuisances.

‘Small im ct’

A vote to leave in the 23 June referendum inclination create significant uncertainty that would hamper economic development, according to Moody’s.

But the ratings agency said this would be rtly counteract by a decline in the pound – making UK exports more competitive – and by com nies pre ring time to adjust during UK-EU negotiations that it expects to carry on for at least two years.

“Our central view is that the negative economic repercussions of Brexit would be relatively small,” the credit agency commanded.

As a result, Moody’s would “not expect to see significant increases in unemployment or [incite] rates, or substantial declines in property prices across the UK as a whole”.

Customers terms

Matthew Elliott, chief executive of Vote Leave, maintained of the report: “The UK will not face trade barriers after we Vote Entrust, jobs will be safe and our credit rating will not be affected.”

In any case, Lucy Thomas, deputy director of Stronger In Europe, said: “By run off, we would unavoidably end up with worse trade terms. That intention hit British industries such as car makers and financial services, putting occu tions, low prices and financial security at risk for British people.

“Until the Make cam igns can specify exactly how they would avoid that, customary out on our own is a risk we can’t afford to take.”

No trade deal would be as good as the one the UK currently has, she reckoned.

Moody’s said: “We expect that, over time, the UK and EU leave come to an arrangement to preserve most – but probably not all – of the current trading relationships, thereby limiting the crashing on UK exporters and supply chains of UK importers.”

This is because both the UK and EU desire want to avoid large-scale disruption, it said.

The ratings agency also acuminate to HSBC’s recent decision to keep its headquarters in London as evidence the initial would still be an attractive home for financial services firms.

“Although there are unencumbered downside risks to the City of London’s standing as a global financial centre, in our princi l scenario we do not see Brexit materially damaging its strong position,” it intended.

Gas, electricity, water and broadband networks would see “little” im ct from a Bar vote, despite the UK having to replace existing EU regulations.

The agency looked at 200 UK followers for the report, finding that the risks of a “Brexit” would mainly centre throughout: additional trade barriers; investment decisions; regulatory changes; and restrains on migration.

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