Brexit could spark currency crisis, warns BlackRock
Investment giant BlackRock said Britain would be "economically worse off" if it voted to leave the EU and warned a Brexit could trigger a UK currency crisis.
The world's largest asset manager said in a hard-hitting report that leaving the EU offers "a lot of risk with little obvious reward".
It added: "We see an EU exit leading to lower UK growth and investment, and potentially higher unemployment and inflation."
An independent UK would have less ability to negotiate trade deals for the crucial services sector, which accounts for around three quarters of gross domestic product (GDP), and would have less clout in setting regulatory standards, according to the report.
"Both would be lengthy and painful processes, and we see the UK as economically worse off in the end," said BlackRock.
The investment group, which has more than $4.5trn (£3.2trn) under management, also cautioned of further stock market volatility in the event of a Brexit and said sterling would be put under additional pressure.
The pound has already fallen to seven-year lows against the US dollar in recent weeks due to Brexit concerns.
BlackRock said the UK was also at risk of potential credit downgrades, if the pound was hit and a vote to leave the EU impacted on the UK's budget and current account deficits.
If the banking sector's access to funding was hit, it could also prompt the Bank of England to cut interest rates even further than the already rock bottom level of 0.5%.