Britain’s economy will suffer if the country votes to leave the EU, JP Morgan shareholders have been warned tonight.
Chief executive Jamie Dimon has cautioned investors that “the range of outcomes of a Brexit is large and potentially unknown”, in a letter seen by City A.M.
“In a bad scenario, and this is not the worst-case scenario, trade retaliation against Britain by countries in the European Union is possible, even though this would not be in their own self-interest,” he said.
Dimon added: “Retaliation would make things even worse for the British and European economies. And it is hard to determine if the long-run impact would strengthen the European Union or cause it to break apart.”
While he acknowledged that “one can reasonably argue that Britain is better untethered to the bureaucratic and sometimes dysfunctional European Union”, Dimon also reminded shareholders of the EU’s originally stated aims.
“The European Union began with a collective resolve to establish a political union and peace after centuries of devastating wars and to create a common market that would result in a better economy and greater prosperity for its citizens,” he said. “These two goals still exist, and they are still worth striving for.”
Dimon’s words of caution follow a bleak set of predictions from IHS Global on what a potential Brexit would mean for the UK.
A vote to leave the EU would most likely result in a major hit to business confidence due to the heightened uncertainty, leading to reduced investment and employment plans, IHS economist Howard Archer warned today.
He added that sterling would be likely to fall sharply, “leading to a substantial rise in consumer price inflation, thereby eroding consumers’ purchasing power”.