Politico reports: Voters in the United Kingdom could deliver a sharp jolt to the global economy and the 2016 U.S. presidential race next week.

Recent polls show strong momentum in Great Britain in favor of abandoning membership in the European Union when the nation votes in a referendum next Thursday, an event that could send global markets plunging, damage the fragile U.S. economy, presage the demise of the EU itself and present a fresh headache for Hillary Clinton in her effort to keep the White House in Democratic hands.

“If the U.K. chooses to leave next week there will be a lot of immediate volatility in markets,” said Megan E. Greene, chief economist at Manulife in Boston. “But you could also end up having an existential threat to the European Union and then the impact on the United States would be even bigger and the market dislocations that follows would be much larger.”

None of this would be welcome news for the Hillary Clinton campaign, which is already facing one destabilizing event in the Orlando massacre and could soon be faced with a second shock.

Clinton is counting on a strengthening U.S. economy to help her defeat presumptive Republican nominee Donald Trump in the fall. But a vote in favor of the U.K. leaving the EU, especially if it’s followed by similar movements in Italy, France and other EU nations, could damage a U.S. economy that grew at just a 0.8 percent rate in the first quarter by driving stock prices lower, pushing the dollar higher, sapping investor and consumer confidence and damaging critical U.S. trading partners.

“The big question here is to what extent this fuels a much bigger phenomenon in anti-establishment movements across Europe, that’s where the real uncertainty is,” said Mohamed A. El-Erian, chief economic adviser at Allianz. “Brexit itself could knock a little bit off of U.S. GDP. For a bigger impact, you would need big recessions all across Europe.”

Global markets are already trembling at the prospect of Britain leaving the EU. [Continue reading…]