The pound could fall by up to 15% in the event of a Brexit, HSBC has warned iStock

Britain's economy could suffer a drop of 1.5% in 2016 and the pound could fall by up to 15% in the event of a Brexit, analysts at HSBC warned on 24 February.

Early in the session, the sterling traded below $1.40 for the first time in seven years, while the euro was trading just under 79p, while the UK currency is on course to post its lowest monthly close against the US dollar since early 2002.

"A vote for Brexit would have potentially huge consequences for all asset classes," HSBC said. "Following a vote to leave we think uncertainty could grip the UK economy, triggering a potential slowdown in growth and a collapse in sterling."

Analysts at the FTSE 100 bank believe the pound could lose between 15% and 20% against the dollar and drift towards lows last seen in the mid-1980s, while it would move towards parity with the euro.

HSBC's view was echoed by CMC Markets analyst Michael Hewson, who warned the pound could fall to multi-year lows against the greenback. "In the last 30 years, the last time the pound managed to close on a monthly basis below the 1.4100 level was way back in 1985, when it was on the way from recovering from its all-time low against the US dollar at 1.0520 in March of that year," he said.

"In this context these levels do mark an important area of support for sterling, which at current levels could prompt significant further losses towards the 2010 lows at 1.3500, as well as the potential to see levels last seen in the mid 1980's, towards 1.30 and 1.20."

According to HSBC, the pound's decline could have a knock-on effect of pushing the inflation rate up by as much as 5%, while Britain's economic growth could be 1% to 1.5% lower than expected, approximately halving the Bank of England's current forecast for 2.3% growth for 2017.

However, the economy could suffer an even sharper slowdown should the BoE lift interest rates to counterbalance a declining sterling, the bank added.

Earlier in February, Goldman Sachs warned a potential Brexit could see sterling suffer a drop that could in turn drive foreign investors away from Britain. "The UK's current account deficit would still be a source of vulnerability despite some recent improvement," analysts at the US investment bank said. "An abrupt and total interruption to incoming capital flows in response to a Brexit could see sterling decline by as much as 15-20%."