Investors Scan the Murky Waters of Britain’s Future

A version of this article appears in print on July 12, 2016, on page B1 of the New York edition with the headline: Investors Seek Clues to Future for Britain.

Britain’s chancellor, George Osborne, urging Britons in June to remain in the European Union. Credit Dylan Martinez/Reuters.

Running Britain right now is not unlike steering a battered corporation.

Dazed leaders are trying to convince stakeholders that a big hit is not a knockout blow — and may in fact be an opportunity. That was the message of George Osborne, Britain’s chancellor of the Exchequer, in the opinion pages of The Wall Street Journal. “Britain may be leaving the E.U., but we are not withdrawing from the world,” he wrote this week before starting a tour of Wall Street to reassure investors. “Britain will be a beacon for free trade, democracy and security, more open to that world than ever.”

Theresa May, who is poised to become Britain’s next prime minister, on Monday offered a similar message. “Brexit means Brexit. And we’re going to make a success of it,” she said in a speech, using the term for Britain exiting the European Union.

Yet a country cannot just leave a large free-trade area that absorbs over 40 percent of its exports — and plays a large role in attracting foreign investment — without suffering significant economic pain.

The pervasive uncertainty is most likely causing people and companies to pull back on their spending. As a result, some economists are now expecting a recession to hit Britain. Also, the pound has slumped against the dollar and the euro. Though a weaker currency may help British exports, by making British goods cheaper in terms of other currencies, it could also damage the country’s economy by making imports more expensive and pushing up the overall inflation rate.

There are signs that investors are not expecting the worst.

The FTSE 100 index, a benchmark that measures the stock price of large British companies, is up 6.7 percent since the day before the Brexit vote on June 23. The FTSE 250, which analysts say contains more companies that would be hurt by Brexit, plunged after the referendum, but after something of a recovery, it is now only 2 percent below its level on the day before the vote. Of course, the weakened pound makes the performance of these benchmarks worse in dollar terms.

British government bonds have rallied in recent days, allowing the government to borrow at a lower cost. This could make it easier for the government to spend money to offset some of the negative impacts of leaving the European Union.

But many things could smash whatever optimism exists in the markets.

The biggest challenge to Britain is what happens with its trade with the European Union. Ideally, the country would continue to access the European single market on current advantageous terms. But Europe’s leaders have said that, to have those terms, Britain must accept the free movement of European Union citizens into Britain. Since concern about immigration led many voters to vote for Brexit, the British government is unlikely to accept that condition. As a result, Britain will be left trying to negotiate a new trade deal with Europe, which is most unlikely to grant the country the same terms as it grants its members.

Britain’s exports could get hammered as a result. A falloff in investment could also occur. An American company wanting to make and sell its products in Europe might avoid Britain and build a factory in Spain or Germany instead.

But it is hard to assess the damage that could be caused. Companies do not invest in countries solely on the basis of whether they get access to certain markets. They may, for instance, prefer Britain because they perceive the country to have looser labor laws than other European countries, or a more reliable legal system.

The British government can also try to introduce changes to make Britain more attractive to outside investment. One approach is to reduce corporate tax rates, a move that Mr. Osborne, who had campaigned against leaving the European Union and who may soon leave office, suggested in his article. But this could anger governments of other countries, including the United States, that want to stop companies moving abroad to lower their tax bills.

Still, it would be hard for European countries to take a punitive stance on trade against Britain. International trade agreements limit many tariffs.

And, crucially, it may not be possible to shut British financial firms out of European business. Take the financial regulations that are to be introduced in 2018. Under these, non-European Union banks that operate under regulations that are considered equivalent to those of the European Union can do business in the bloc. Lawyers caution that this arrangement does not grant the same automatic access as Europe’s so-called banking passports, and they add that future disagreements between Britain and the European Union might lead the bloc to deny Britain equivalence.

Still, they say that it is possible that London-based banks will end up providing more or less the same services as they do today. “That is the Utopian position, and if you asked me if we’ll be there in five years, I think we will be,” said Jake Green, a partner at Ashurst, a law firm. “But there will be so much uncertainty.”

That uncertainty will no doubt increase when trade talks actually begin between Britain and the European Union. The British prime minister may also have to contend with the possibility that Scotland, which voted against Brexit, may have another referendum on whether it should leave the United Kingdom. And a deep or long-lasting recession could sap support for Ms. May, leading to more political volatility. “In the coming weeks, I will set out my plans to take our economy through this period of uncertainty,” she said in her speech on Monday.

But weeks may be too long for the markets to wait.