Deloitte puts up a worst-case scenario for Brexit vote

Consultant Deloitte is war-gaming with clients over a potential 25% fall in the FTSE 100 following a Brexit vote next month, it has emerged.

A presentation by Rick Cudworth, Deloitte’s UK resilience and crisis management leader, and chief economist Ian Stewart, also factors in a 30% slump in the pound against the dollar after a vote to leave in a worst-case scenario.

There would also be a tumble to parity against the euro.

The company, which stressed the post-Brexit turbulence was “a thought experiment, not a forecast”, said the “key risk channels” over the months ahead included a drying up of finance and dearer credit, equity and currency sell-offs.

There was also a risk of business confidence and risk appetite plunging below post-Lehman levels.

Cudworth said the fall in confidence would put a “premium on communication” by businesses.

But Deloitte added that a “fractious divorce could be destabilising for Europe”, saying that opportunities could also be thrown up including a boost for exporters as a result of the weaker pound and potential mergers with distressed rivals.