The Washington-based International Monetary Fund (IMF) has warned of dire consequences for the UK if it exited the EU. In the run up to the EU membership referendum set for June, there is growing uncertainty over whether Britain will sustain steady economic growth.
IMF Warns Brexit Could Have Negative Impact on UK Economy
The IMF, which largely supports David Cameron’s handling of the economy, has said that the UK faced added risks to its economy following the run up to the referendum. The economy is already facing threats from unstable financial markets and a sluggish global trade.
Speaking to CNN, IMF chief Christine Largarde asserted, “Uncertainty is not a good things because economic players do not like uncertainty. There is no hiring, no investment; they do not make decisions during uncertain times.”
Largarde further noted that Britain was a beneficiary of its financial ties with the EU. The country has not only benefitted in terms of trade but also in terms of the input of migrant workers.
She added, “In my opinion, a Brexit is bound to have negative effects on all fronts.”
Her comments indicated her frustration with the UK, one of the few growing economies in the world and the instability a referendum is bound to cause for Britain and for other countries.
In spite of a dramatic slowdown in the Chinese, US and Eurozone economies, Britain’s economy has remained strong.
The IMF has been particularly supportive of George Osborne who has managed, to a large extent, to stabilize the property market through stronger bank regulations and reforms in stamp duty tax.
Even then, the IMF’s annual report shows that the relatively positive outcomes espoused by the British economy were subject to risks and the referendum on EU membership only added to the uncertainty.
The IMF recommended that the Treasury increase spending in the event of the slightest signs of weak economic growth. Priority areas that would require increased spending include education, healthcare and infrastructure.