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We have already discussed some of the potential negative effects of the United Kingdom's withdrawal from the European Union, specifically on employment throughout the entire EU. The possible adverse consequences were highlighted again by the U.S. Federal Reserve chairwoman Janet Yellen and the Organization for Economic Co-operation and Development (OECD).
Janet Yellen advised that if the UK referendum to leave the EU is passed, there would be "significant economic repercussions". As the U.S. Federal Reserve is contemplating raising interest rates, the Brexit has become an important factor in their decision. The Federal Reserve may wait until after the June 23rd voting date in order to assess the global economic impact of its result. Ms. Yellen's remarks have been echoed by other members of the board of the Federal Reserve, with one pointing out the domino-effect a fall in European markets could have across the Atlantic.
In a press release, the OECD predicted that a "UK exit from the EU would immediately hit confidence and raise uncertainty which would result in GDP being 3% lower by 2020." This OECD statement indicates that not only will the European Union suffer from this exit, but the UK itself will be at risk. However, it is possible that the negative effects could be dampened by reducing regulatory burdens in the domestic market.
Despite the plethora of damning statistics in opposition of a Brexit, the "Leave" campaign is gaining steam. If the referendum does not pass, it will likely not be the end of a push for reform to the UK and its relations with the EU. If it does pass, it likely will take years for the exit process to complete.
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