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GBP: Gloomy outlook if the UK were to leave the EU - Investec

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 19, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Research Team at Investec, notes that the UK Chancellor George Osborne yesterday presented a gloomy outlook if the UK were to leave the EU.

    Key Quotes

    “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.”
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