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BREXIT - Myth 4

BREXIT - Myth 4Public Finances - The UK's budget balance would improve substantially if we were to leave the EU.

A simple calculation suggests that the UK would save £9 billion a year if it did not have to contribute to the EU's budget. Yet at least two thirds of this saving would probably be eroded by the UK government compensating businesses and organisations that benefit from EU subsidies; continuing contributions into the European Economic Area (EEA) if the UK were to retain access to the single market; or losses from the positive contribution made by Eurozone migrant workers.

Although we do not expect the UK economy to collapse if voters choose to Brexit, the process of leaving would create uncertainty, which could reduce growth and, in turn, government tax receipts. As such, we do not believe the government's fiscal position would change enough to cause a substantial reaction from gilt markets.

BREXIT - Myth 4

If you would like to receive a copy of the white paper, 'If you leave me now', which explores the implications of Brexit for the UK economy and markets, and/or a copy of "Breaking up is hard to do" which explores the implications for investments and currency for investors, please contact us on +351 289 392484 or email us at info@privatefund.management.

Private Fund Management would like to thank Rathbone Investment Management of Mayfair London for their kind permission in allowing the reproduction of this "Brexit" article. In the following weeks, we will be publishing the "Five Myths" relating to the "Brexit" debate, leading up to the referendum.

Private Fund Management
T: +351 289392484/289392485
Address: Avenida Jose Dos Santos Farias, Loja 1, Lote 83/84, Almancil,8135-167. Portugal.

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