AXA - The economic impact of Brexit on the EU

Key points

- The impact of Brexit on the EU economy is more difficult to assess than that on the UK economy.

- In such a scenario, a number of factors would play out, with contradictory effects on economic activity and financial conditions.

- Impacts on trade and confidence are most clearly negative for economic growth in the EU post Brexit.

- Conversely, significant investment reallocations away from the UK could benefit the EU in terms of output, jobs, productivity and access to capital.

- Overall, the impact of Brexit on the EU economy is unlikely to exceed 0.5% of GDP. Negative effects are likely to be more immediate than positive ones.

- The bigger question in our view is the implication of Brexit for the future of the EU from a political and institutional perspective.