The UK is the largest economy in Europe after Germany, and a voracious net importer of goods from across the continent. Any breakdown in trade between Britain and the rest of Europe would hit Britain of course, but also the other nations.
Much sooner than the hit to companies’ sales figures stemming from lower exports materialised however, the hit to market sentiment would threaten share prices.
The biggest question a vote to leave by Britain would raise as far as other EU countries are concerned is; who next? Arguably up until David Cameron actually called the referendum, it was seen as pie in the sky to suggest one of the larger nations in the bloc would really leave.
If that does turn out to be the case though, it would take a brave person to say other nations exiting can be ruled out. A domino effect could take hold. The people of southern countries may rightly or wrongly see an exit as a way to escape their huge debt piles, while northern nations may see an exit as a way out of dealing with the migration crisis.
All this is speculative of course but what is very hard to dispute is that a vote to leave would throw up big new questions about the future direction of the EU members still in the bloc, not just Britain’s future, and not just UK equities.
