By David Hargreaves

One of the inherently frustrating things about being a tiny country like New Zealand is that you can get your house in reasonable order, the economy's going okay, and then something big happens overseas that mucks it all up.

I confess, I didn't expect to ever write a 'Brexit' column. I simply never saw it as likely that Britain might actually, after all, when push came to shove, decide to leave Europe.

Then again, I didn't expect we would still be talking about Donald Trump in 2016 and, as a lifelong football fan, I never ever expected the Leicester City team to win the English Premiership. NEVER.

And for those with no understanding or particular interest in English football, can I just say that the likelihood of Leicester becoming the best team in England (which of course HAS already happened) would have been rated by most people as much less of a possibility than either the Donald getting the keys to The Whitehouse or Britain jumping off into its row boat and paddling away from the rest of Europe.

It's a funny old world at the moment.

We should find out sometime during next Friday (24th) evening our time if Britain has decided to make the great leap into the unknown. If it does then it's something of a leap into the unknown for all of us.

It seems to me that economists et al have not really seriously considered, till now, the possibility that Brexit might really happen. And it might not. But the chances of it actually happening are now quite clearly the strongest they've been.

What would it mean to us then?

Well, that's the problem. Nobody really knows. And when 'the markets' don't know what is going to happen, then they tend to regress in age and temperament. Toys exit the pram at a great rate of knots. Reports on the markets become exercises in using the word 'volatility'. Markets do not like 'uncertainty'.

This all comes at a pretty interesting time for New Zealand, with our housing market hot, migration levels hot, and the economy simmering quite well - though pumped up a fair bit by the migration. And then there's the rampant Kiwi dollar, continuing to pile on the pressure for exporters and making sure the likes of the dairy farmers are doing it even tougher than they would have been.

One of the most likely outcomes of a Brexit vote would be to knock the stuffing out of the Kiwi dollar. Usually when global markets throw a tantrum there is a 'flight to safety' of funds. Yes, essentially people stomp their feet, grab their money, and take it home, which means their home country.

Now, you might imagine that our beleaguered Reserve Bank wouldn't mind such an outcome, but you really should be careful what you wish for. A Brexit vote is definitely the 'nuclear option' when it comes to trying to get the Kiwi dollar down. I can still recall sitting in front of my computer screen during the darkest moments of the 2008 Global Financial Crisis watching in terrified fascination as the New Zealand dollar lost cents in value in minutes against the American currency. Let the volatility genie out of the bottle and anything can happen.

Look, it might not happen like that this time around. There's some evidence in recent times, notably during the period of sharp market volatility globally earlier this year, of the Kiwi dollar actually retaining some favoured investment status in the face of uncertainty. But we don't know until confronted by the reality of Britons getting into that rowboat. That's the problem. There's so much we don't know about what might come out of a Brexit.

The currency of course would not be the only victim of global volatility. It could be reasonably expected our sharemarket would get thrown around and interest swap rates may likely go up as well.

If any or all of these things happen then all bets are potentially off in terms of the immediate condition of our economy and yes, indeed, things like the housing market. It would really depend on when some sort of certainty around just what will happen to Britain is settled upon. But that could be a little while.

So, this really is the great unknown factor that little old New Zealand is facing in the next week - though we are not alone in that of course.

If we assume, as most economists here still seem to be, that Britain will vote to stay in Europe, then come Monday June 27 we'll be looking at (very probably) a still rising Kiwi dollar, still rising houses, and an economy still on a firm footing. Then the problem becomes what to do about the dollar and will the US Federal Reserve come to our Reserve Bank's rescue by hiking American interest rates at the end of next month?

However, if Britain goes all Leicester City on us, then all bets could yet be off. Then it would be time to be reminded yet again what a small country we are.