Speaking to fiduciary clients at an investment update this month, Standard Bank’s director of equity strategy, David Gorman, said that whereas the Island had in the past been on the coat-tails of the UK for trade with the EU, in accordance with Protocol 3 of the 1972 Treaty of Accession, if UK voters choose to come out of the EU, the Island’s authorities would have to renegotiate on their own behalf.
In addition, the Island would probably be downgraded by the credit rating agencies, he said, and if the States decided to take on further market debt in order to build the new hospital, it could cost them more.
Another probable repercussion would be a fall in the value of sterling, as well as UK economic growth and government bonds, although Mr Gorman said he would expect the FTSE to go up and London property values to remain level.
