Moody's warns of '˜significant impact'of a Brexit vote

The group’s quarterly report on the outlook for the global economy confirms that the June 23 vote is one of a number of “unique challenges” facing the European Union.

It said Brexit was the “most immediate concern” and renewed its warning that in the event of a vote to leave the EU, “prolonged uncertainty until alternative agreements emerge would be a cause for economic stress”.

But it added the EU is also struggling amid the biggest influx of refugees in half a century, heightened security concerns, political impasse in Ireland and Spain and protests in France over proposed labour reforms.

It comes after a bleak report on the future of the EU earlier this month saw Moody’s claim a Brexit could spark the collapse of the EU.

Moody’s said at the time the EU faced “significant vulnerabilities”, adding “the question is when the system breaks, not if”.

The group’s most recent report also gives a gloomy outlook for the world economy, forecasting growth to remain below pre-financial crisis levels for “some time”, hit by emerging market woes.

It also trimmed growth forecasts for the UK over the next two years among a raft of modest downgrades for advanced economies, which it said are suffering after the oil price rout that left stock markets in turmoil at the start of the year.

The UK could see growth pull back sharply to as low as 1.5% from 2.2% in 2015, according to the forecast.

Moody’s expects overall G20 advanced markets growth of 1.7% for 2016 and 1.9% for 2017, compared to 1.9% in 2015.