The OECD on Wednesday became the latest global body to warn of the economic dangers of Britain leaving the European Union, as figures showed a slowdown in Britain's economic growth. The Organisation for Economic Cooperation and Development said Britons would be financially worse off if they backed a so-called Brexit in a referendum on June 23, and said there was "no upside" in leaving.
The conclusions echo those of the Treasury department, and follow warnings by the IMF, the G20 and US President Barack Obama of the potential economic damage of leaving. However, Brexit campaigners said the inter-governmental body was "making every possible worst case assumption" and all the dire warnings were "just wrong". In a study presented in London, the OECD said that "in some respects, Brexit would be akin to a tax on GDP, imposing a persistent and rising cost on the economy that would not be incurred if the UK remained in the EU". It said gross domestic product (GDP) would be 3.3 percentage points smaller by 2020 if Britain left the EU than if it stayed, and 5.1 points smaller by 2030.
The OECD cited the impact of economic uncertainty, higher trade tariffs, a reduction in economic migration and the impact on the sterling currency as near-term risks. "The UK is much stronger as a part of Europe, and Europe is much stronger with the UK as a driving force. There is no upside for the UK in Brexit," said OECD secretary-general Angel Gurria.
In real terms, the relative loss of GDP would see household income reduced by £2,200 (2,800 euros, $3,200) in the next four years and £3,200 by 2030 - and by up to £5,000 in the most pessimistic case. The analysis reflects the conclusions of a detailed study made by Britain's finance ministry last week but, like that report, was dismissed by "Leave" campaigners.
"We completely disagree with its pessimistic assumptions about life outside the EU," said junior economy minister Priti Patel, who is campaigning for a Brexit. "Despite it making every possible worst case assumption, it is still forced to admit that the British economy will continue to grow if we vote Leave." Arron Banks, the co-founder of the campaign group Leave.EU, condemned the string of warnings by global bodies.
"Every single one of these institutions missed what was the biggest financial bubble the world has ever seen. I think they're just wrong," he said. Giving evidence to a parliamentary hearing, Banks conceded that a Brexit could result in a fall in sterling and could see prices rise, but "it will recover". The millionaire, a donor to the anti-EU UK Independence Party (UKIP), said that even if the worse forecasts were accurate, "it would be a price worth paying to get back our democracy".
The eurozone is heading for crisis and "I would pay almost any price to be away from it", he said. Opinion polls show the "Remain" camp has a slight lead, and experts warn the uncertainty is already impacting economic growth. New figures published Wednesday showed GDP grew by 0.4 percent in the first quarter of this year, down from 0.6 percent in the prior three months.
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