News

Brexit risk predicted to be nearly 50%

Analysts at Societe Generale have predicted there is a 45% chance that Britain will vote to leave the European Union later this year, potentially inflicting “significant economic damage” over the next decade [1].

A decision in favour of Brexit could mean the UK economy would suffer greatly, according to Societe Generale, wiping 0.5-1% off annual Gross Domestic Product (GDP) until 2026 [1].

The Daily Telegraph has reported that 62% of the 137 Chief Financial Officers of some of the UK’s largest companies, gave a positive response when asked whether remaining in the EU is in the interest of British businesses [2]. Although, according to a survey by Deloitte, UK businesses are worrying less in relation to Brexit being harmful to their future prospects [2].

Paul Mason, Economics Editor of Channel 4 News, predicts David Cameron’s negotiations with Brussels in February will fail, and all Westminster parties are going to have to spell out their contingency plans [3].

Opinions between experts are divided, with Forbes writer Tim Worstall in favour of Brexit: “Whether Brexit boosts or damages the British economy depends not upon Brexit itself, but what economic policies follow after,” he said [4].

No formal date for the referendum has been announced, although it could be as soon as early summer, following negotiations with Brussels [1].

 

[1] The Telegraph. ‘Brexit risk is nearly 50%, warns Societe Generale’. telegraph.co.uk

[2] The Week. ‘EU referendum: business opposition to Brexit wanes’. theweek.co.uk

[3] The Guardian. ‘The real problem with Brexit: nobody knows anything’. theguardian.com

[4] Forbes. ‘How excellent, Brexit risk now 50% says Societe Generale’. Forbes.com