The Australian economy will shrink by at least one per cent as a result of the UK's decision to quit the European Union, according to a leading financial services firm.
Auditor KPMG says its best case scenario is for UK gross domestic product to shrink by three per cent as the country transitions out of the EU, which would mean a one per cent decline in Australia's GDP because of a deterioration in net exports.
"The implications for Australia are still being worked through, but any impact will be felt via our trade accounts," KPMG said, adding that the worst case scenario for Australia is for a 1.4 per cent decline in GDP.
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