World Economy

‘Brexit’ a Huge Risk?

‘Brexit’  a Huge Risk?‘Brexit’  a Huge Risk?

The UK potentially faces the biggest economic upheaval in several generations should voters mandate a Brexit in the national referendum on the UK’s future membership of the European Union, according to David Page, senior economist at AXA Investment Managers, the effect on financial markets profound, FETrustnet reported. While there is no set date or even month for the national vote, many are now anticipating that a referendum could in fact come in the first half of this year. The base case is that people will vote to stay in the EU, Page says, but a narrowing margin is making the specter of an exit for Britain more likely and ramping up the threat to financial markets and hence investors. “The potential cost of Brexit is likely to be in the order of magnitude of 2-6% of gross domestic product, although we readily accept that any such estimates have a high degree of uncertainty,” he said. “As such, even a relatively small perceived chance of exit is likely to affect market perceptions of mean growth rates in the economy,” he added.