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German Finance Minister and World's Largest Asset Manager warn on Consequences if UK Leaves the EU

March 18, 2016 12:26 PM
Bank of England Museum in London

The contribution of the vital financial services sector could be hit badly by Brexit

Wolfgang Schäuble, German Finance Minister, has warned that Brexit would make Europe "less stable and more volatile." He also said that Britain would be shut out of the single market if it left the EU, critically impacting the financial services sector. If Britain wanted to continue having access to the single market this could only happen if it agreed to pay into the EU budget and accept freedom of movement.

On a similar theme BlackRock, the world's largest asset manager, reflected on the likely damage to Britain's financial services sector. In a report it stated that Brexit would "cut into the financial industry's major contribution to the UK economy, tax revenues and trade balance."

Fund manager Investec added to the concerns with John Wyn-Evans, the head of investment strategy, commenting:

"It is probable that banks would have to apply for new licences to operate on the continent, which would reduce the attraction for international banks to base their European operations in London. Any reduction in banking activity would have severe knock-on effects for London - both the economy and the real estate market."