WASHINGTON, DC – The International Monetary Fund (IMF) has reiterated its view that if British voters decide to leave the European Union (EU) in a June 23 referendum, it will be the biggest threat to the country’s economy.
London’s status as a global financial center could be eroded if the UK votes to leave the EU, the Washington, DC-based IMF warned on Friday.
“Uncertainty over the outcome of the referendum on EU membership, and about the implications of a potential Leave vote, already appears to be having an impact on investment and hiring decisions, with recent surveys of economic activity falling to their weakest levels in three years,” the IMF said.
“A vote for exit would precipitate a protracted period of heightened uncertainty, leading to financial market volatility and a hit to output. Following a decision to exit, the UK would need to negotiate the terms of its withdrawal and a new relationship with the EU — unless it abandoned single market access and relied on WTO rules, which would significantly raise trade barriers,” the organization added.
IMF chief Christine Lagarde said on Friday there were no economic positives to Britain leaving the EU and that the impact would range from “pretty bad to very, very bad.”
The prediction from the IMF comes a day after the Bank of England also warned about the negative impact of an EU exit.
The Organization for Economic Co-operation and Development (OECD) has also warned that British voters risk paying a “Brexit tax” equivalent to a month’s salary by 2020 if they leave the EU.
Last week, the head of the British Treasury, George Osborne, said if UK voters decided to leave the EU , it would be “catastrophic” for jobs and homeowners would face a “significant hit” from lower house prices.
Opinion polls have indicated that UK voters believe staying in the EU would be best for Britain’s economy, but that support for leaving and remaining still remains at a virtual tie.
The economy and the impact of a possible British exit, or Brexit, on jobs, wages and trade are a key battleground for both the “In” and “Out” campaigns before Britons vote on June 23 on whether to stay in the 28-member bloc.
The “In” campaign, those in favor of remaining in the bloc, argue that leaving it would risk the UK’s prosperity, diminish its influence over world affairs, and result in trade barriers between the UK and the EU.