EU referendum - PwC comments on the economic impact

Published at 08:01 AM on 24 June 2016

Andrew Sentance, senior economic adviser at PwC, commented:

"The UK leaving the EU is potentially a big leap into the unknown, disrupting trade relationships with our most important and nearest trading partner and creating uncertainty for financial markets and business in general.

"It will be very important for the government to act quickly to resolve the inevitable uncertainty. The EU is a vital market for exporters so it will be important that we secure access to that market in any future settlement with the EU. I would expect that most businesses in the UK want us to keep a close and positive relationship with the EU even if we are not a full member. That could be done by remaining a member of the European Economic Area, or by securing our own specific trade relationship like Switzerland - though this second route is likely to take much longer and be more difficult to negotiate.

"It is important to keep things in perspective, but in the short-term, we need to brace ourselves for more volatility. The final polls yesterday were pointing to Remain and this was the general expectation of financial markets. This potential shock could hit the pound and stock markets badly, and push up the cost of borrowing because of the additional political risk.

"There is also the possibility of political fall-out as this decision has gone against the government's stated policy of Remain. It is difficult to see how that will play out but it will add to the climate of uncertainty.

"However bumpy the ride looks, the UK will still be a member of the EU until an exit deal is negotiated. In the short-term, our trade with Europe carries on as before and people can move freely around the European Union. The world will not change overnight, but the economic skies will look darker in the next few years as the consequences of this decision play out."


Note to editor

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