The UK’s future relationship with Europe will be a key issue at the May 7 General Election as David Cameron has promised to hold a referendum on the UK’s membership of the European Union (EU) by the end of 2017 if he remains Prime Minister, notes ING.
"If a referendum is called there will be two years of uncertainty ahead of the actual vote that may unsettle businesses and households. The economy will likely lose some momentum and the BoE may raise interest rates more cautiously," ING argues.
"As we saw with last year’s Scottish Independence vote, foreign investors may take fright with UK asset prices and sterling likely to come under downward pressure.UK GDP growth in 2017 could be half a point lower, irrespective of the outcome of the vote," ING adds.
"Should the UK vote to leave, Brexit raises clear risks for trade and investment and, by implication, growth and jobs. 2018 GDP growth could be sub 1.5%, GBP/USD would likely drop below 1.40 and the Bank of England may loosen monetary policy. This outcome could also reignite the campaign for Scottish Independence," ING projects.
PS: indicators that you can use in your trading system.
