`Brexit’ and `Brexit’: The Biggest Risks to U.K. Economy in 2016

The two biggest risks facing the U.K. economy next year are Brexit and Brexit, according to economists. And the U.S., with its rate increases and presidential campaign? Doesn’t even register.

Forty-three percent of economists surveyed by Bloomberg News said a British departure from the European Union is the biggest threat, while 13 percent chose the buildup to the referendum on membership of the bloc. Thirty-nine percent of respondents picked these as their second-biggest risks.

The EU vote could come as soon as mid-2016 and by the end of 2017 at the latest — Prime Minister David Cameron has yet to fix a date. An exit would have repercussions for the pound and gilts, and would also trigger negotiations on all manner of economic and other agreements, leaving foreign companies to question the wisdom of investing in the U.K.

Economists picked weak global growth as the third-biggest risk. The Organization for Economic Cooperation and Development cut its world economic forecasts last month, as a slowdown in emerging markets spilled over into developed nations such as Germany and Japan.

Bloomberg

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.