ECONOMIC IMPLICATIONS OF THE VOTE FOR BRITAIN:
ECONOMIC GROWTH
- Britain's economy would grow more slowly outside the EU than if it stayed in, according to projections by the government, the Bank of England, British research institutes, international organisations and academics.
- Chancellor of the Exchequer George Osborne has warned of a "DIY recession" and the BoE has said a "material slowdown" could result after a Brexit.
- Prime Minister David Cameron has said he will step down by October and there has been no news so far of Osborne's future. There is also the possibility of another independence referendum in Scotland, could also weigh on economic growth.
- A small group of pro-Brexit economists has said leaving the EU will boost growth in the years to come, although at least one of them predicts a shallow downturn first.
- The fall in sterling, which on Friday hit its lowest level against the dollar since 1985, could help exporters, although demand in many countries around the world remains weak.
- The OECD says there could be deeper global economic fallout if a Brexit undermines confidence in the EU, a scenario not included in its forecasts.
MONETARY POLICY
- BoE governor Mark Carney has responded to the vote quickly, saying the central bank was ready to provide STG250 billion ($A489.52 billion) of additional funds to support markets. He also said the Bank will consider additional policy responses in the coming weeks.
CURRENT ACCOUNT
- Britain racked up its biggest current account deficit on record in 2015, equivalent to 5.2 per cent of economic output. The shortfall reflected higher flows of dividends and debt payments to foreign investors than similar flows into the country as well as its wide trade deficit. Carney has said a Brexit could test the "kindness of strangers" who fund the balance of payments deficit.
STERLING
- Despite the risk premium already built into sterling, analysts predict the currency will fall further. Before the referendum, investors predicted the pound would hit a multi-decade low about $US1.35.
JOBS
- Most forecasters think Britain's unemployment rate - now at a 10-year low of five per cent - will rise after leaving the EU.
- Wages will probably bear the brunt of any post-Brexit slowdown, the International Monetary Fund says. Britain's National Institute of Economic and Social Research estimates real consumer wages will be between 2.2 per cent and seven per cent lower in real terms by 2030 than if Britain had stayed in the EU.
- By contrast, Economists for Brexit says Britain's labour market could become more dynamic through the repeal of EU regulation and the elimination of some of the EU's highest import tariffs.
TRADE
- Leaders from the US, Japan, Germany and France warned Britain that leaving the EU would hurt its standing as a global trading power.
- President Barack Obama said Britain would join "the back of the queue" for talks with the US, and French President Francois Hollande said leaving the EU would risk Britain's access to the single market.
- Pro-Brexit economists have dismissed the warnings as scaremongering and say Britain could forge trade deals with the EU and countries beyond.
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