While HSBC have confirmed that they'll keep their HQ in the UK, they still have a job to do in deciphering what an exit would mean

HSBC detail various outcomes for a UK exit

  • Sterling could fall 15-20% against the dollar - pushing it down to 1980s levels - and
    towards parity with the euro.
  • This currency collapse could push inflation up by 5pp and raise import prices for firms
  • Growth could be 1-1.5pp lower, roughly halving our current 2017 growth forecast of 2.3%
  • Market uncertainty could be good for gilts, given their safe-haven status
  • Labour supply would shrink if some existing migrants returned home or restrictions on
    inflows were imposed
  • Sectors with a large proportion of non-British EU workers could face higher labour costs -
    notably in retail, construction, airlines and facilities management
  • In construction, where skills shortages already exist, costs could spiral and limit capacity to deliver on house building and infrastructure targets
  • Uncertainty could hit UK bank stocks, although they should be relatively well placed to
    weather a growth slowdown.
  • A reduction in passenger traffic might affect airlines and corporate structures might need to change if the UK left the single EU aviation market
  • Immigration raises trend growth and is needed to help close the public sector budget deficit: lower inflows could have long-term consequences.
  • Over time, Brexit could be beneficial if it allowed the UK to 'cherry pick' immigrants from all over the world and forge new trading partnerships.
  • Regardless of the outcome, the UK should remain a flexible and dynamic economy - the
    unknown is how economically destructive and drawn out the transition phase would be.

They have three economic scenarios for an exit;

While HSBC make some sensible points I think there's going to be a lot of overanalysing of the exit risks. Let's take one example. If you are a French firm in the middle of doing business with a UK firm working on construction projects in London, an exit isn't going to suddenly mean you pull out. What's likely to happen is that the French firm phones the UK firm and says "are we still good?" and the UK firm will say "yes, as long as you keep paying". The only time things will turn sour is if people stop paying or pulling business and it will take more than some new red tape to halt that.