GBP: Gloomy Outlook if the UK were to Leave the EU - Investec
Research Team at Investec, notes that the UK Chancellor George Osborne
yesterday presented a gloomy outlook if the UK were to leave the EU.
“The UK Treasury's 200 page analysis document warned the British government would lose £36 billion in net tax receipts, equivalent to 8p on the basic rate of income tax or 7p on VAT, if the UK leaves the EU and negotiates a bilateral trade agreement with the bloc. The study concluded that a Canadian-style model (if the UK negotiated a new trade deal with the EU that did not require freedom of movement) would leave Britain’s GDP by 6.2% smaller by 2030, relative to a scenario where the UK remains in the EU. Many press articles ran with the Treasury's estimate that an exit could cost households £4,300 a year.
The Pound rallied on the day as the Treasury’s scenarios may have been seen by investors as a convincing argument for the UK to vote remain. The Chancellor is scheduled to discuss the findings with the Treasury Select Committee next Thursday.”