`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.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam