Recession warning as UK marks one month to EU vote

AFP, LONDON: Britain could be plunged into a year-long recession and lose hundreds of thousands of jobs if it voted to leave the EU next month, the government warned Monday in a report critics dismissed as “deeply biased”.
Speaking at a hardware store in southern England, Prime Minister David Cameron said Britain risked sparking a “do-it-yourself recession” by backing a Brexit in a referendum on June 23.
“The shock to our economy after leaving Europe would tip the country into recession,” Cameron said, as he launched the Treasury’s second report on the impact of leaving. “It is the self-destruct option.”
The study presented two potential short-term scenarios, predicting that gross domestic product (GDP) would be either 3.6 per cent or six per cent lower two years after a “Leave” vote than it would otherwise be.
There would be at least 520,000 and up to 820,000 jobs lost, sterling would fall by at least 12 per cent and up to 15 per cent, and house prices would fall by at least 10 per cent and up to 18 per cent, it said.
“With exactly one month to go until the referendum, the British people must ask themselves this question: can we knowingly vote for recession?” asked finance minister George Osborne.
But former cabinet minister Iain Duncan Smith, a leading figure in the Vote Leave campaign, said the analysis offered a “deeply biased view of the future” that “should not be believed by anyone”.
Duncan Smith said previous Treasury predictions had often been wrong and criticised the government for failing to publish details of any potential benefits of a Brexit.
“Every Treasury report has a central presumption from which there are downsides and then there are upsides,” the former work and pensions minister told BBC radio.
“They have today chosen only to produce the downside. That makes this report categorically unfair and biased as a Treasury report.”
Arron Banks, a multimillionaire backer of the Leave.EU campaign, said the Treasury report was “laughable”.
“If the economy hits the skids and the pound falls, it will be because the recovery was built on sand,” he said.
    
An earlier Treasury report into the long-term impact of a Brexit said households could be £4,300 (5,400 euros, $6,100) a year poorer after 15 years than they would otherwise have been.
The International Monetary Fund and the Bank of England have also warned of the economic consequences of leaving.
Leading Brexit campaigner Boris Johnson, the former mayor of London who is tipped as a future prime minister, hit out at the “hysterical claims” by “Project Fear”.
In an article in the Daily Telegraph on Monday imagining how historians would look back on the debate, he suggested that “Project Fear turned out to be a giant hoax”.
“The markets were calm. The pound did not collapse... and a new relationship was rapidly forged based on free trade.”
The Vote Leave campaign claims that leaving the EU will save the equivalent of £4,600 for each household, based on Britain’s contribution of £350 million each week.
Analysts say Britain actually contributes £280 million to the EU budget, taking into account its rebate.

Recession warning as UK marks one month to EU vote

AFP, LONDON: Britain could be plunged into a year-long recession and lose hundreds of thousands of jobs if it voted to leave the EU next month, the government warned Monday in a report critics dismissed as deeply biased. Speaking at a hardware store in southern England, Prime Minister David Cameron said Britain risked sparking a do-it-yourself recession by backing a Brexit in a referendum on June 23. The shock to our economy after leaving Europe would tip the country into recession, Cameron said, as he launched the Treasurys second report on the impact of leaving. It is the self-destruct option. The study presented two potential short-term scenarios, predicting that gross domestic product (GDP) would be either 3.6 per cent or six per cent lower two years after a Leave vote than it would otherwise be. There would be at least 520,000 and up to 820,000 jobs lost, sterling would fall by at least 12 per cent and up to 15 per cent, and house prices would fall by at least 10 per cent and up to 18 per cent, it said. With exactly one month to go until the referendum, the British people must ask themselves this question: can we knowingly vote for recession? asked finance minister George Osborne. But former cabinet minister Iain Duncan Smith, a leading figure in the Vote Leave campaign, said the analysis offered a deeply biased view of the future that should not be believed by anyone. Duncan Smith said previous Treasury predictions had often been wrong and criticised the government for failing to publish details of any potential benefits of a Brexit. Every Treasury report has a central presumption from which there are downsides and then there are upsides, the former work and pensions minister told BBC radio. They have today chosen only to produce the downside. That makes this report categorically unfair and biased as a Treasury report. Arron Banks, a multimillionaire backer of the Leave.EU campaign, said the Treasury report was laughable. If the economy hits the skids and the pound falls, it will be because the recovery was built on sand, he said. An earlier Treasury report into the long-term impact of a Brexit said households could be 4,300 (5,400 euros, $6,100) a year poorer after 15 years than they would otherwise have been. The International Monetary Fund and the Bank of England have also warned of the economic consequences of leaving. Leading Brexit campaigner Boris Johnson, the former mayor of London who is tipped as a future prime minister, hit out at the hysterical claims by Project Fear. In an article in the Daily Telegraph on Monday imagining how historians would look back on the debate, he suggested that Project Fear turned out to be a giant hoax. The markets were calm. The pound did not collapse... and a new relationship was rapidly forged based on free trade. The Vote Leave campaign claims that leaving the EU will save the equivalent of 4,600 for each household, based on Britains contribution of 350 million each week. Analysts say Britain actually contributes 280 million to the EU budget, taking into account its rebate.