LONDON: If a majority of Britons vote to leave the European Union in Thursday’s referendum, they will be setting the UK on a recession course – and will damage Europe’s and threaten the global economy.
The warning is being issued by the International Monetary Fund (IMF) and is perhaps the starkest economic forecast of the effects of the so-called Brexit.
Campaigning in the referendum has been suspended following the murder of Labour MP Jo Cox – an active Remain campaigner -- in northern England on Thursday.
On Saturday, the 52-year-old man accused of shooting and knifing her to death appeared in court here. When asked his name, he responded: ”Death to traitors, freedom for Britain”.
The IMF delayed the publication of the hard-hitting report after Cox’s murder.
The report warns the UK “would likely be worse off economically in the long run.” It says Britain runs the risk of a potential credit squeeze if liquidity markets dry up, hurting both spending and investment.
In hard numbers, the IMF sees growth slowing sharply this year and the economy shrinking 0.8 per cent in 2017. The impact would see the UK economy 5.6 per cent smaller by 2019. Britain’s jobless rate would rise above 6 per cent and its deficit would be worse – meaning more austerity and less to spend on health, education and policing.
“While recognising that this choice is for UK voters to make and that their decisions will reflect both economic and non-economic factors, directors agreed that the net economic effects of leaving the EU would likely be negative and substantial,” the IMF says.
It says other EU economies are most vulnerable, especially Ireland, Cyprus, Malta, the Netherlands and Belgium should a majority vote Leave on Thursday.
The latest polls, taken before Cox’s death, show Leave with 53.3 per cent support to Remain’s 46.7 per cent.
Polling begins at 7am until 10pm, and the counting takes place then. The result should be known by early Friday morning.
