One of the biggest arguments against Britain leaving the European Union — a Brexit — is that investors and companies will withhold investment in the UK and hurt the economy.
Pro-unionists and independent analysts said that this is already happening due to the uncertainty over whether a Brexit will happen or not when Britons vote in the EU referendum on June 23. In other words, people don’t want to invest in UK entities in case Britain leaves the EU and severs EU single market ties.
However, the former chief of the British Chambers of Commerce — which represents thousands of businesses across Britain which are responsible for 5 million employees collectively — John Longworth, told BBC’s “Wake Up To Money” radio programme on Wednesday that there’s no evidence that firms are delaying investment ahead of the referendum.
“There is no evidence that business decisions are being held up at the moment,” said Longworth, who is now head of Vote Leave’s business council.
“Uncertainty is a feature of British life. No businesses prefer uncertainty but we live in a very uncertain world. Other things the IMF report said of course, is that the global economy is an uncertain place and global debts are two and a half times global GDP.”
He added that he was “not at all concerned,” when asked whether he is worried about the International Monetary Fund’s warning that a Brexit is a “real possibility” and could cause “severe regional and global damage.“
Alongside the gloomy predictions about what will happen if the UK votes for Brexit, the IMF also cut forecasts the UK’s GDP growth in 2016. Growth is expected at 1.9% this year, down from a forecast of 2.2% in January. That cut came alongside a global growth forecast cut, which saw predictions slashed from 3.4% in January to 3.2% on Tuesday.
On Tuesday, Osborne welcomed the IMF’s warning on Brexit, saying in a statement:
While Britain remains one of the fastest growing advanced economies in the world, the IMF’s warnings about our exit from the EU are stark. For the first time, we’re seeing the direct impact on our economy of the risks of leaving the EU.
The IMF says that these risks are a reason why they have reduced Britain’s growth forecast this year.
If Britain leaves the EU, the IMF says there would be a short-term impact on stability and long-term costs to the economy.
However Longworth say that he doesn’t believe what the IMF or Osborne has to say.
“The IMF has been wrong consistently on economic forecasting over the years, in fact they were wrong about forecasting the downturn,” said Longworth.
“And it’s very interesting they produced this report at the moment because the IMF are part of that political establishment in Europe which has a vested interest in us remaining in the European Union. I wouldn’t be surprised if the Chancellor of the Exchequer (George Osborne) told them to bring forward this report, which wasn’t due to after the referendum.”