World Economy

Osborne Sees Brexit as ‘Permanent Damage’

Osborne Sees Brexit as ‘Permanent Damage’ Osborne Sees Brexit as ‘Permanent Damage’

Finance Minister George Osborne said a vote to leave the European Union would do permanent damage to the country's economy and could cost each household £4,300 ($6,100) a year by 2030.

Seeking to focus voters on what he called the biggest question of their generation, Osborne said all the alternatives to remaining in the union would leave Britain's economy smaller than if it stayed in the world's biggest trading bloc, news outlets reported.

"Put simply: over many years, are you better off or worse off if we leave the EU? The answer is: Britain world be worse off, permanently so," Osborne warned.

Osborne, writing in The Times newspaper, said a decision to leave would be "an extraordinary self-inflicted wound" which would damage trade and investment.

Most opinion polls show the rival campaigns running neck and neck although one published on Monday showed the "In" campaign had retained a seven percentage-point lead.

Another poll published last week showed voters were very sensitive to the cost to their own finances of a Brexit.

Pollster YouGov said 45% of respondents backed 'In' compared with 36% for 'Out' if the cost of a Brexit for them was £100 a year.

The latest appeal by Osborne, a close ally of Prime Minister David Cameron, for Britons to vote to stay in the 28-member bloc spurred accusations from "Out" campaigners that the government was resorting to unreliable estimates.

Brexit supporters say Britain's economy would flourish outside the EU as it would be free to negotiate its own trade deals and could chop the bloc's rules and regulations.

Mortgage Rates

Osborne said Britain's homeowners could face higher borrowing costs if there was a British exit.

Speaking to the BBC in Washington last week, where he was attending the International Monetary Fund’s half-yearly meeting of finance officials, Osborne said: “The Bank of England is independent and it makes its decisions on interest rates. But the overwhelming view of the experts here in Washington is that if Britain leaves the EU, prices would go up and there would be instability in financial markets.”

He added: “That means it’s likely that mortgage rates would go up, families would pay the price of Britain leaving the EU.”

The chancellor argued that sterling would slump if the UK voted to leave the EU, which would push up the cost of imports. That would lead to rising prices and therefore the Monetary Policy Committee would have to act to battle inflation.