Speaking at a media roundtable yesterday, Credit Suisse senior investment adviser Robert Parker said if the UK was to separate from the Euro Zone it will result in large, foreign investors moving out.
Mr Parker explained that upcoming elections in the UK could see the formation of “very unstable coalitions”, which would in would turn see the creation of poor economic policies and the possibility of the UK separating from the EU.
“You could have a coalition of Conservatives, Liberals and the UK Independence party – which in that case [they] will have a referendum on the EU,” Mr Parker said.
“The opinion polls at the moment are very clear that if we have a referendum on the EU today it would probably go against the EU. That is a real threat,” he said.
“If we have a Labor, Scottish Nationalist [and] Liberal coalition, which is another possibility, I think we are just going to end up with some very poor economic policies,” Mr Parker said.
Mr Parker also said the opinion of the “right-wing conservative parties” that they can leave the European Union and then operate as Norway and Switzerland do is misguided.
“They say it will be no big deal, ‘We will just end up like Norway or end up like Switzerland’, but those are very small economies,” Mr Parker said.
“Inevitably if the UK did vote to leave or if there was an expectation to vote – because don’t forget capital will move before the event – I think we would see quite significant capital outflow, and that wouldn’t just be hot money but it would be real investments,” he said.
“So it is going to be very bad news for investment, foreign investment and growth – so I can’t possibly think of a positive scenario for the UK,” Mr Parker said.
