S&P warns Brexit could jeopardise pound's standing
The warning comes after the Institute for Fiscal Studies (IFS) said the UK could face two more years of austerity in the event of a vote to leave the 28-nation bloc on 23 June.
S&P analyst Frank Gill said that an exit from the EU could deter foreign direct investment and “other capital inflows.”
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The IFS think-tank said a vote to leave could see public finances take a hit of up to £40 billion in 2019-20, if gross domestic product is 2.1 to 3.5 per cent lower over the period, as predicted by the National Institute of Economic and Social Research (NIESR).
Gerard Lyons, co-chair of Economists for Brexit, said: “The IFS’s forecasts follow directly from the economic growth numbers. If one has a more upbeat view of the economic outlook with Brexit, as the Economists for Brexit group does, then naturally the budget numbers improve considerably.
“The analysis from the IFS highlights how vulnerable UK finances are to any economic setback, but we could easily suffer such a setback remaining in the EU.”