In three months time the UK will vote in a referendum on whether to remain part of the EU or go it alone. Now forecasters are weighing up the potential fallout of a 'Brexit,' with risks ranging from "small" to "severe."
In a report published on Tuesday, credit agency Moody's said that while the UK economy would be impacted by a decision to leave the European Union, the hit would be "small" and unlikely to cause major job losses.
Moody's said that if the UK managed to preserve many of its trade terms and agreements with the EU, it would avoid large-scale disruption to the economy.
The credit agency said that while economic growth would be affected, a decline in the British currency would make UK exports more attractive, and therefore offset potential GDP shrinkage.
"Our central view is that the negative economic impact of Brexit would be relatively small," Moody's said in its report.
It concluded that it would not expect to see any significant increases in unemployment or interest rates should Britain vote to leave the 28 nation bloc come June 23.
Difference of opinion
The report from the credit agency was released just a day after the publication of a study carried out by PricewaterhouseCoopers (PwC) on behalf of the Confederation of British Industry (CBI) business lobby group. In contrast to Moody's, PwC warned on Monday that a Brexit would cause what it termed irreparable damage to the UK economy.
It said the UK economy would suffer a severe shock, incurring financial losses of over 100 billion pounds (127 billion euros, $143 billion) and shed close to 1 million jobs.
"This analysis shows very clearly why leaving the European Union would be a real blow for living standards, jobs and growth. The savings from reduced EU budget contributions and regulation are greatly outweighed by the negative impact on trade and investment," said Carolyn Fairbairn, CBI's director general.
Both Moody's and PwC did find some common ground in their reports, insisting that for the UK economy to come out relatively unscathed from a Brexit 'Yes' vote, it would have to negotiate access to European markets similar to levels it currently enjoys. They also said lengthy negotiations to secure a new UK relationship to the EU would likely put off foreign investors in the meantime.
hch/cjc (dpa, Reuters, Moody's, PwC)