OREANDA-NEWS. The impact of Britain's exit from the European Union would be broadly negative for UK corporates, with the transport, property and leisure industries at most risk along with smaller retailers, Fitch Rating says. In contrast, some exporters would benefit from moderate sterling depreciation, as long as a new trade deal was swiftly negotiated.

Protracted and acrimonious negotiations would increase risks and widen the impact to other sectors, including food and pharmaceuticals, while specific utilities could be affected if Brexit triggered Scotland's departure from the UK.

We have analysed four scenarios following the UK referendum: a vote to remain in the EU; a Brexit with a trade deal concluded within two years; a Brexit on unfavourable terms with no comprehensive trade deal; and a Brexit followed by another Scottish independence referendum and the breakup of the UK.

A vote to remain in the EU is Fitch's base case. It would be largely business as usual, with the potential for minor benefits for retailers from a moderate recovery for sterling and consumer confidence.

In the event of a Brexit, we believe the most likely outcome would be a successfully negotiated trade agreement that preserves the UK's attractiveness for investment, with concessions on both sides including some restrictions on free movement of people.

In this scenario, we would expect moderate sterling depreciation due to initial uncertainty as well as softer economic growth and a weaker near-term investment outlook while negotiations are ongoing. The most vulnerable sectors would be those with a large portion of their costs in euros or dollars such as UK airlines, which also have a large proportion of dollar-denominated debt. UK exporters, however, could benefit from improved price competitiveness.

The secondary effects of a managed Brexit, including reduced travel, lower net immigration and a weaker job market would increase pressure on other sectors, including hotel and leisure groups and smaller retailers that don't have much power to bargain with suppliers. Homebuilders would be affected by lower demand and higher costs as well as the risk of falling property prices, which could also hurt residential property companies. Commercial property companies would be exposed to the weakening performance of retailers and potentially weaker demand for office space.

An unfavourable post-EU deal would have similar but more pronounced and longer-lasting adverse effects. Retail failures would jump, potentially to the levels seen in 2008/09 and consumer prices would rise to compensate for rising costs. EU subsidies would probably be lost, hurting the food and farming sectors. Pharmaceutical companies would also risk losing EU funding and could face much higher costs if the UK does not remain part of the EU system for clinical trials.

In the event of a Scottish exit from the UK, the main additional impact would be on specific utilities companies, due to uncertainty over networks and over the funding of renewables subsidies. Sensitive manufacturing facilities in the aerospace and defence sector might also need to be relocated, causing disruption for the sector.