POLITICS

Brexit Would Trigger A Year-Long Recession, Warns George Osborne

23/05/2016 07:35
Ben Birchall/PA Wire

George Osborne has warned Brexit would cause a year-long recession.

A Treasury analysis released today claimed economic growth would be at least 3.6% lower if the UK voted to leave the EU at the June 23 referendum but could plummet as much as 6%.

The chancellor was tell voters not to inflict a "do-it-yourself" recession on themselves one month today.

"It's only been eight years since Britain entered the deepest recession our country has seen since the Second World War," he will say.

"Every part of our country suffered. The British people have worked so hard to get our country back on track. Do we want to throw it all away?"

Pro-Brexit former Conservative cabinet minister Iain Duncan Smith said dismissed the Treasury figures.

"As George Osborne has himself admitted, the reason he created the independent forecaster, the OBR, was because by 2010 the public simply did not believe the Government's own economic forecasts," he said.

"The Treasury has consistently got its predictions wrong in the past. This Treasury document is not an honest assessment but a deeply biased view of the future and it should not be believed by anyone."

Using "cautious" assumptions, with the UK entering into a new trade deal with the EU, it found GDP would be around 3.6% lower after two years compared to the forecast for continued growth after a vote to remain. A sharp rise in inflation would also be expected and house price growth faces being hit by 10%.

Under a "severe shock scenario", where Britain would leave the Single Market and default to World Trade Organisation rules, GDP would be 6% lower after two years and there would be a further increase in inflation, with a hit to house price growth of 18%.

Yesterday, David Cameron slapped down one of his own ministers after she claimed the UK did not have a veto on Turkey joining the EU.

Armed Forces Minister Penny Mordaunt told the BBC’s The Andrew Marr Show the UK would have “no say” over whether Turkey was allowed in to the union.

But just minutes later, the Prime Minister appeared on ITV’s Peston on Sunday and said Turkey would probably join the EU “in about the year 3000”.

And he rejected Mordaunt’s suggestion the UK did not have a veto as “absolutely wrong”.

Also on HuffPost

Suggest a correction
Comments

CONVERSATIONS