British citizens head to the polls on Thursday to decide whether the United Kingdom will sever ties with the European Union, or maintain its membership in the bloc. While both sentiment polls and betting odds have shifted toward one outcome or the other, the polls are still too close to call, leaving the world waiting with bated breath.
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One thing, though, is certain about the situation for former International Monetary Fund First Deputy Managing Director John Lipsky: A so-called Brexit vote, or move to end the U.K.’s relationship with the EU would “definitely be negative.”
Lipsky cited many reasons for the concern including how such a move would upset many industries not just in the U.K., but cause ripple effects around the world thanks to a requirement to renegotiate all of the U.K.’s trade policies with other European Union nations.
“Many manufacturers who have located in the U.K., such as automaker manufacturing, is certainly predicated on their participation in the single market,” Lipsky explained. “There are lots of continental-European based auto manufacturers that would be happy if the access of U.K.-produced cars were reduced. Those kinds of effects would run through the British economy.”
He continued by saying the uncertain period would slow down not only the U.K. economy, but bring a volatile period to global markets as well, upsetting currency and stock markets around the world.
“There’s virtual unanimity that the British currency is going to weaken and that means any profits earned by corporations in the U.K. will be worth less in the U.S., so it’s a negative [for America],” he said.
Though Lipsky is not a British citizen, he said if he were, he would no doubt be in the “remain” camp, arguing for the U.K. to maintain its EU ties simply because the economic arguments to stay are too compelling to fathom any other outcome.