Pro-EU campaigners have seized on an International Monetary Fund (IMF) warning about the impact of British exit from the European Union as evidence it is a threat to Britain's economy. David Cameron said it showed that "leaving the EU would pose major risks for the UK economy" and chancellor of the exchequer George Osborne described it as the clearest independent warning yet of the danger posed by Brexit.
“Today we have a stark warning from the IMF. For the first time they’re saying that the threat of Britain leaving the EU is having an impact on our economy and they cut our growth forecast as a result. They say were we actually to leave the EU there would be a short-term impact on stability and a long-term cost to the economy,” Mr Osborne said.
The IMF issued the warning in its six-monthly World Economic Outlook, identifying Brexit as a risk to global economic growth alongside the war in Syria, the refugee crisis, growing income inequality and the Chinese downturn.
Bad for growth
The fund’s chief economist said Brexit was a real possibility and warned that it would be bad for growth even if the transition out of the EU proceeds smoothly.
"In the United Kingdom, the planned June referendum on European Union membership has already created uncertainty for investors; a 'Brexit' could do severe regional and global damage by disrupting established trading relationships," he said.
The IMF's intervention comes during a crucial week, with the Electoral Commission due to decide which campaign groups should be the "designated" campaign for each side, with access to £7 million (€8.7 million) in public funds each.
Remain campaign
Britain Stronger in
Europe
is expected to be the official Remain campaign with Vote Leave, led by anti-EU Conservatives battling with the Ukip-dominated Grassroots Out to lead the Leave campaign. Leave campaigners dismissed the IMF warning on Tuesday, accusing the fund of being biased in favour of the EU and pointing out that its forecasts have often been wrong in the past.
Matthew Elliott, chief executive of Vote Leave, suggested Mr Osborne had asked the IMF to intervene. "The IMF has talked down the British economy in the past and now it is doing it again at the request of our own chancellor," he said. "It was wrong then and it is wrong now. The irony is that if we Vote Remain, our voice at the IMF will be silenced as the EU wants to take our seat at the top table in return for the £350 million we hand to Brussels every week."
Ukip leader Nigel Farage said the IMF had been "hijacked by the architects of the failing EU project" and served the interests of big banks not small companies and average people. "The IMF was wrong when it supported the euro, wrong when it failed to predict the global recession and is wrong now it is trying to scare the British people," he said.
