Brexit could wipe a fifth off the value of the pound

As a UK referendum on whether or not to leave the EU approaches, the major banks have been analysing the possible impact of a ‘no’ vote on the financial markets – and the bottom line seems to be that sterling would be hit hard, while the reaction in stocks and bonds would be more nuanced.

A vote on ‘Brexit’ – or British exit – is now seen as most likely to take place in late June and while many polls see the British public as likely to vote for the status quo, the chances of a vote to exit are seen as far from negligible.

“The referendum is likely to be near term, probably in late June (23rd or 30th), [and] the outcome is uncertain. We continue to put the probability of Brexit at around 20-30%, so it is not our base case but by no means a trivial risk,” write Michael Saunders, head of West European economic research, and his colleagues at Citi.

“The effects of Brexit, if it happens, are likely to be large and painful in economic and political terms, both for the UK and the EU as a whole. The possible effects of Brexit are inevitably uncertain, but we suspect it would trigger significant economic weakness for the UK, with a 15-20% depreciation of sterling in trade-weighted terms, resultant return to import-driven inflation and a major policy dilemma for the MPC. It would also likely prompt a wider wave of referendums and embolden other separatist movements within the EU,” they add.

Opinion polls suggest the referendum result is too close to call................

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Politics...

• Brexit will obviously cause short term fluctuations in exchange rates, fluctuations happen all the time.
  
• Banks and large corporates always aim to protect themselves whilst maximising profits through speculation.
• The UK will be stronger once we take back political control from the undemocratic, corrupt, federal EU monster.
• Trading relationships will suffer minimal disruption.

Are you buying into Gold?

Cue the scaremongering.

Noone really knows what will happen. Fact.

I'd rather stay in but what I will not be happy about is biased simplistic coverage that is already starting to come through my letter box, no matter from what persuasion.

Nothing ventured nothing gained is my take on leaving the EU, we are the second largest economy in the EU soon to be the biggest, its an opportunity, people should not be afraid to take a risk, a risk I personally believe is not as big at the political pundits suggest, bit of a Y2k in my opinion.

Lot of scaremongering as others have suggested, the concessions Cameron has supposedly secured are a complete waste of time, nothing that will make any difference to the likes of us chaps.

As I said, "its a real opportunity." lets go it alone

Soon to be the biggest? How?

The UK will never go it alone again. Be it economically or militarily. It has to cosy up to someone.

If Europe was just a free trade area, the UK would love it. But that will never be.

I would bet everything on a coerced yes vote. I would be saddened by that.

Strangly I am considering that The EU may be better off without us and that if the "renegotiation" goes through unamended I might vote leave as the only ethical choice to protect the European project sad as I would be Call me Dave is playing with fire and may be about to learn the cost

How in a so called Failed Euro is sterling failing so much its gone from 71p to 79 in a short time

http://www.telegraph.co.uk/finance/...in-will-become-biggest-economy-in-Europe.html

The biggest asset to the UK is its people, without a doubt, we did invent most of what makes the world go round after all.

Would it be the end of the EU if the UK decided to leave?

For me its more about the losses to European freedoms if we stay

And the biggest millstone around its neck is its history.

It's like Leeds or F***st. Times change and having an unbalanced view of oneself can hold back the need to adapt. I am not saying don't appreciate the good things in the past but having rose tinted specs can be dangerous.

It would do slightly better.

The EU should kick the UK out. It's never been committed enough to join in properly.

The UK should be given the terms, if they don't like them then goodbye.

No.

Changes will be minor, the UK will still support and co-operate with the EU, much political smoke and mirrors I guess.