The UK’s economy would suffer if it left the European Union, an international credit rating agency warned today as it spelt out the dangers of Brexit.
Moody’s–one of the Big Three credit rating agencies–Monday morning argued a vote to leave the EU in June’s referendum could lead to a fall in exports, a drop in international investment and a “negative” impact on the UK’s credit rating, NewsNow reported.
The intervention comes as London Mayor Boris Johnson handed the ‘Leave’ side a boost by announcing he was backing Brexit.
Kathrin Muehlbronner, a senior vice president at Moody’s, said: “We consider it positive that the referendum will take place as soon as June, as a lengthy period of uncertainty on the part of firms and investors would damage the UK’s economic growth prospects.
“That said, the outcome of the referendum remains wide open. In our view, a decision to leave the EU would be credit negative for the UK economy.”
In a statement on Moody’s website, the agency elaborated on its concerns, and said: “The economic costs of a decision to leave the EU would outweigh the economic benefits.
“Unless the UK managed to negotiate a new trade arrangement with the EU that preserves at least some of the trade benefits of EU membership, the UK’s exports would suffer.
“It would likely lead to a prolonged period of uncertainty, which would negatively affect investment, in Moody’s view.
“It would also place a significant burden on policy-makers who would have to renegotiate the UK’s trade relations with the EU and other countries and regions, as well as reconsider other areas such as regulatory and immigration policies.”
Sunday, Prime Minister David Cameron said the economic future of the UK, either in or out of the EU, was “ the heart of the argument.”
Speaking on The Andrew Marr Show, he said: “If you remain in a reformed EU you know what you’re going to get–you know how to do business, you know how to create jobs, you know how to continue with our economic recovery.
He added: “So it could cost jobs, it could mean overseas businesses not investing in Britain. It would be a step into the dark, a real risk of uncertainty and that’s just the last thing we need in our country right now.”
Supporters of Brexit claim the UK’s position as the fifth largest economy in the world would enable it to secure favorable trade deals with both the EU and other countries.
