The pound will lose 20% immediately after the vote if Great Britain votes in favor of Brexit: an exit from the European Union following the June 23 referendum would have negative consequences on the currency and inflation, according to a report published today by the National Institute of Economic and Social Research (Niesr). In the event of Brexit, British GDP will suffer a contraction of 1% in 2017 and 2,3% in 2018 and could drop by 3,7% by 2030, according to the report which is in line with the scenarios already envisaged by various banks. If, on the other hand, Great Britain remains in the EU, GDP will increase by 2% this year and by 2,7% next year.
“A vote in favor of leaving the EU would represent a severe shock to the British economy, – says the report. – Increased risk and uncertainty would lead the pound to depreciate by around 20% immediately after the referendum, and this would unleash strong inflationary pressures”. Prices could rise by 4%, according to the Niesr.
Last night the Chancellor of the Exchequer George Osborne had warned that "tens of thousands of jobs" in the financial sector are at risk in the event of Brexit. According to calculations by the British Treasury, 285 jobs are directly linked to the export of financial services to the EU. Exit would therefore be "catastrophic for jobs and wages," Osborne said.
A survey of British Chambers of Commerce reveals that 54% of businesses are in favor of staying, down from 60% in February. After yesterday's warning from Prime Minister David Cameron that Brexit could jeopardize peace in Europe, today five former NATO secretaries-general and 13 former US defense, foreign and security officials warned of the risks of leaving the EU.
"We are worried that if Great Britain left the EU, its role and influence in the world would be reduced and Europe would be dangerously weakened”, write former US secretaries of state, including George Shultz, Madeleine Albright and Robert Gates, in the open letter. Pro-Brexit campaign leaders said "this is a worthless appeal from exes who have a backward-looking worldview".
