Ahead of the UK's EU referendum we will release a monitor each week including the most recent news, opinion polls and what to watch.
This week, HM Treasury released an analysis of the long-term economic impact of the EU membership. The analysis finds that UK GDP would be 3.8%-7.5% lower after 15 years in case of a 'Brexit' but the 'leave' camps have dismissed the analysis as being misleading. Former BoE Governor King warned not to 'exaggerate the impact, either of staying in or of leaving'.The most recent opinion polls still indicate a very close race but 'remain' is still ahead. Obama has begun his three-day visit to the UK and he is likely to express his support for UK staying in the EU.
Next week, focus is on Chancellor of Exchequer Osborne who is being questioned by the Treasury Committee on the costs and benefits of the UK's EU membership. We expect the first estimate of GDP growth in Q1 to show growth slowed markedly to 0.3% q/q in Q1 from 0.6% q/q in Q4. If we are right, this would be the lowest growth rate since Q4 12. Markets likely to stay sensitive to comments, reports and opinion polls.
To read the entire report Please click on the pdf File Below