The government and the Bank of England have both said that a Brexit would hurt the economy. Moody’s also warned that it could downgrade U.K.’s credit rating if the country leaves the union. By leaving the union, the UK would need to negotiate a new trade agreement with the EU that would preserve some of the trade benefits of EU membership.
“As the June 23 vote on European Union membership approaches, traders are increasing bearish bets on the biggest U.S exchange-traded fund tracking Britain’s shares. Short interest on the iShares MSCI United Kingdom ETF jumped eightfold in the past two months, according to data compiled by research firm Markit. Bank of America Corp. recommended last week that investors consider hedging as the risk of a Brexit isn’t evenly priced in,” according to Bloomberg.
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iShares MSCI United Kingdom ETF