Wednesday 28 September 2016

Brexit would create 'DIY recession' - Osborne

Sam Lister in London

Published 23/05/2016 | 02:30

'Mr Osborne is expected to warn voters today:
'Mr Osborne is expected to warn voters today: "With exactly one month to go to the referendum, the British people must ask themselves this question: can we knowingly vote for a recession?' Photo: PA

Quitting the European Union would plunge Britain into a year-long recession, British Chancellor of the Exchequer George Osborne has claimed.

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It would suffer an "immediate and profound" economic shock following a vote to leave that would be made worse by the negotiations that followed, according to Treasury analysis released by Osborne.

It claims that economic growth would be at least 3.6pc lower following a Brexit win in the June 23 referendum but could plummet as much as 6pc.

The stark warnings come on the back of alerts by Bank of England governor Mark Carney and the IMF that quitting would leave the UK in the red.

Mr Osborne is expected to warn voters today: "With exactly one month to go to the referendum, the British people must ask themselves this question: can we knowingly vote for a recession?

"Does Britain really want this DIY recession? Because that's what the evidence shows we'll get if we vote to leave the EU."

The Treasury report analyses the potential impact of Brexit on the economy in the two years after a vote to leave and looks at the transitional effect on trade and investment, the rise in uncertainty and financial market volatility.

Using what it calls "cautious" assumptions, with the UK entering into a new trade deal with the EU, it claims that GDP would be around 3.6pc lower after two years, compared to the forecast for continued growth after a vote to remain.

It also claims that a sharp rise in inflation would also be expected and house price growth faces being hit by 10pc.

Irish Independent

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