Janet Yellen: Significant repercussions if British vote for Brexit

US Federal Reserve Board Chairwoman Janet Yellen arrives for testimony before the Senate Banking, Housing and Urban Affairs Committee on June 21, 2016 in Washington, DC.
US Federal Reserve Board Chairwoman Janet Yellen arrives for testimony before the Senate Banking, Housing and Urban Affairs Committee on June 21, 2016 in Washington, DC.PHOTO: AFP

WASHINGTON (AFP) - Federal Reserve Chair Janet Yellen warned on Tuesday (June 21) that a British vote to break with the European Union could rile markets and have an impact on economic growth.

Two days before Thursday's (June 23) Brexit referendum in Britain, she told a Senate panel that the issue was one of a number of important risks facing the US and the global economy.

"One development that could shift investor sentiment is the upcoming referendum in the United Kingdom," she said.

 

"A UK vote to exit the European Union could have significant economic repercussions." Yellen counted the risks from the Brexit vote as one reason why the Fed will continue to move very cautiously on raising interest rates and tightening US monetary policy.

She said that a pro-Brexit vote could rupture what she called "a very important relationship" between Britain and the European continent, and would impact all of Europe.

"It would usher in a period of uncertainty that is very hard to predict," she added, warning of volatility in global markets.

Yellen's comments added to similar warnings from the International Monetary Fund, the European Central Bank and other leading economic officials on markets turmoil and a slowdown in British economic growth if the country decides to quit the 28-member EU.

The most recent polls indicate the "leave" and "remain" camps are virtually tied just two days before the referendum.

 

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