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In
its latest round of economic forecasts, the European Commission,
the bloc's executive, predicted GDP growth in Britain of 1.8
percent this year and 1.9 percent next.
That was slightly higher than the euro zone but down on last
year's British growth of 2.3 percent and on the 2.1 percent for
2016 and 2017 that it forecast for Britain in February, before
Prime Minister David Cameron set the referendum for June 23.
"Risks to the outlook are tilted to the downside, reflecting
less favorable external demand and uncertainty in the lead-up to
the June referendum," the Commission report said. It also said
the uncertainty posed a risk to euro zone economic growth, which
posted a surprise 0.6 percent surge in the first quarter.
The Brussels-based Commission was at pains to stress, however,
that it was making no forecast for what might happen to either
the British or euro zone economies if Britain leaves the EU - a
process that would be begun by the vote next month but would
only be completed after negotiations of a least two years.
"Our forecasts are built on the assumption of no policy change
and for the UK we know what no policy change means of course so
we are not going to comment ... especially not on this issue,"
Economics Commissioner Pierre Moscovici told reporters when
asked about the possible effects of Brexit on the economy.
The impact on trade, investment and employment has been a key
issue in the referendum campaign, with the government and Remain
camp forecasting a sharp hit from leaving the EU and the Leave
side stressing benefits from trading with other regions.
Commission officials insist they are making no contingency plans
for a British departure, not least because they fear any such
plan would leak and play into a campaign in which it does not
want to be portrayed as trying to manipulate public opinion.
Moscovici repeated that the EU wants Britain to stay after
renegotiating its membership terms in February. EU officials and
diplomats have warned, however, that other states will be in no
mood to give Britain free access to EU markets if it chooses to
end its obligations as a member of the bloc.
(Editing by Richard Balmforth)
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