IMF warns of economic doom should UK leave EU

MASSIVE economic and political shockwaves could be unleashed in Europe and beyond should Britain vote to leave the EU when it goes to the polls on June 23.

That’s the somewhat dystopian view from the International Monetary Fund (IMF) in its latest World Economic Outlook (WEO) where it also cut its global growth forecasts.

“Brexit” it said “could do severe regional and global damage by disrupting established trading relationships” citing it as a major threat to world economic recovery. Its chief economist Maurice Obstfeld, dubbed Brexit a “real possibility”.

Should Brexit occur an “extended period of heightened uncertainty” would ensue.

However, it also pointed to wider destabilising macro-trend such as “the tragedy of large-scale refugee inflows” to EU nations, wider jitters in the financial markets and internal pressures building in China over growing income inequality.

But Norman Lamont, the former chancellor poo-pooed the IMF, saying there was “”no real evidence” for such claims.

Meanwhile, the International Chamber of Commerce, which represents 6.5 million businesses of all sizes and sectors across 130 countries, published its latest findings that show 86% of international businesses feel the UK should vote to stay in the EU.

Just 8% believe the UK should leave the EU, according to its Brexit Survey. Some 46% said they would reduce their UK-based investment in the event of a Brexit, while 35% said they would reduce employment and 74% suggested the UK would have less influence in the EU.

Sir Mike Rake, chair of ICC UK, said: “This is a seminal moment for the UK and will have major implications for many generations to come. It is vital that this be a fact-based debate. The facts presented in our survey are crystal clear: international business wants the UK to stay in the EU. They think we are better off in the EU and should continue to constructively engage to improve competitiveness and attract FDI.”

Former chancellor Exchequer Alistair Darling will provide thoughts on the impact upon business of the UK’s EU Referendum at the CFO Agenda on 28 June.