Few expect that Britain's departure from Europe will set off a full financial crisis like the one seen after the collapse of the investment banking giant Lehman Brothers in 2008. ... If no deal is struck, the rules of the World Trade Organization could apply. They give member nations the rights to impose potentially steep tariffs on imports, raising the possibility of a tit-for-tat trade skirmish between Britain and the Continent.
In the meantime, the lack of clarity is likely to damage economic growth in Britain and beyond.
''You get a rabbit-in-the-headlights phenomenon where businesses don't want to make new decisions, or new investments, because they are uncertain about the future,'' said John Van Reenen, director of the Center for Economic Performance at the London School of Economics. ''The immediate effect will be a lowering of investment activity, a lowering of hiring. There will an immediate slowdown of growth.''
This article was published by The New York Times on June 23, 2016
Link to article here
Related publications
Life after Brexit : What are the UK's options outside the European Union?, Swati Dhingra and Thomas Sampson, CEP Brexit Analysis Series Paper No.01, February 2016
The complete set of CEP Brexit Analysis papers is available in one publication. Download from here.
Related links
Swati Dhingra webpage
Gianmarco Ottaviano webpage
Thomas Sampson webpage
John Van Reenen webpage
Trade Programme webpage
Growth Programme webpage
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