An American investment bank has warned that Jeremy Corbyn becoming the Prime Minister would be worse for UK businesses than Brexit.
Morgan Stanley has said it thinks the UK will hold another general election at the end of next year, as Theresa May won't be able to get the Brexit deal she's aiming for and this will break the Tories down.
The bank claimed if the Labour leader comes to power the value of UK companies will be damaged by nationalisation, high taxes and high spending to help low-income families.
The European equity team at Morgan Stanley said: “For the UK market, domestic politics may be perceived as a bigger risk than Brexit."
It added that even if Brexit negotiations reach a positive conclusion "the scope for UK sensitive assets to rally may be muted, unless we also see an improvement in the Government’s position in opinion polls.”
The bank also says the sectors most at risk from Corbyn's leadership are utilities, telecommunications, financial services, tourism and postal services, The Guardian said.
Despite the warning the bank did admit: “It is certainly plausible that the Labour party could ultimately moderate some of its more radical policy ideas; the alternative could be the most significant political shift in the UK since the end of the 1970s.”
In response a spokesperson for the Labour Party said that the next Labour government will boost investment, something which has been demanded by the FSB and CBI. They also said the party will "protect 95% of people from any tax rises and ensure our public services work for people, not profiteers."
They added that hedge funds and banks won't be able to "bring our economy to its knees again. Labour will put an end to the rigged economy that benefits only the super rich, to build a society that works for the many not the few."