Saturday, June 18, 2016 6:15:23 AM
IMF says Brexit would trigger UK recession
"Anti-elite sentiment may lead to Brexit, warns PM's 'best friend'"
Annual report on the British economy predicts ‘negative and substantial’ effects if Britain left the EU
IMF chief Christine Lagarde speaks in Vienna about the consequences of a British
exit from the EU. Photograph: Georg Hochmuth/AFP/Getty Images
Katie Allen
Saturday 18 June 2016 09.00 AEST
Last modified on Saturday 18 June 2016 09.01 AEST
Leaving the EU would hit British living standards, stoke inflation and wipe up to 5.5% off GDP, the International Monetary Fund has warned with less than a week to go until the referendum.
The IMF used its annual report on the British economy to say Brexit would plunge the UK into recession next year and that it could see no economic advantage in leaving the EU.
Previous IMF interventions .. https://www.theguardian.com/business/2016/may/13/imf-warns-stock-market-crash-house-price-fall-eu-referendum-brexit .. have drawn an angry response from leave campaigners who have already said the fund should not interfere in the UK’s democratic process. The leave camp has also attacked its record on economic forecasting.
Responding to the latest IMF remarks, Matthew Elliott, chief executive of Vote Leave said: “The IMF has chosen to ignore the positive benefits of leaving the EU and instead focused only on the supposed negatives. If we vote leave, we can create 300,000 jobs by doing trade deals with fast growing economies across the globe. We can stop sending the £350m we pay Brussels every week. That is why it is safer to vote leave.”
The IMF said last month that Brexit could spark a stock market crash and a steep fall in house prices .. https://www.theguardian.com/business/2016/may/13/imf-warns-stock-market-crash-house-price-fall-eu-referendum-brexit . In Saturday’s report to conclude its annual assessment of Britain’s economy, it added that a leave vote would tie the UK up in trade negotiations that could drag on for years.
The resulting uncertainty would hit spending and financial markets, it said, estimating that even under a relatively benign scenario in which the UK negotiated a trade status similar to that between Norway and the EU, output would fall by 1.5% by 2019, compared with where it would be under continued EU membership.
It modelled a less favourable outlook, in which GDP would fall more steeply. “In the adverse scenario of long negotiations and a default to the trade rules of the World Trade Organisation, GDP plunges by 5.5% by 2019,” it said.
Under that scenario, the UK would fall into recession in 2017, IMF officials said. “The implication would be negative growth in 2017,” said one official briefing reporters in a conference call.
In a baseline scenario in which the UK remains in the EU, growth would be expected to recover in late 2016, as the effects of the referendum waned. But the IMF’s experts also forecast various threats to the UK economy beyond the closely fought vote.
They included Britain’s relatively weak trade position, with a record current account deficit last year .. https://www.theguardian.com/business/2016/mar/31/uk-economy-growth-record-trade-deficit . There was also uncertainty about the degree to which the UK’s poor productivity growth .. https://www.theguardian.com/business/2016/feb/18/uk-productivity-gap-widens-to-worst-level-since-records-began .. would recover and risks associated with the UK’s “buoyant” property market.
The IMF, which has warned of a slowdown in the global economy .. https://www.theguardian.com/business/2016/apr/17/imf-urges-spending-boost-growth , urged British policymakers to be on alert for economic shocks and even raised the prospect of a UK interest rate cut.
The report said: “In the event of protracted demand weakness and inflation undershooting, monetary and fiscal policies should be eased, taking into account the benefits and potential costs of such a move.
“Conversely, monetary tightening may need to be initiated earlier than currently envisaged if core inflation or wage growth in excess of productivity growth begins to rise sharply.”
In the near term, the main risk to Britain’s economy was next week’s referendum, the fund’s directors said. “While recognising that this choice is for UK voters to make and that their decisions will reflect both economic and non-economic factors, directors agreed that the net economic effects of leaving the EU would likely be negative and substantial,” they said in a press release accompanying the report.
“In the event of a vote to leave, directors recommended that policies be geared toward supporting stability and reducing uncertainty.”
Brexit would also hit neighbouring EU economies, though the impact would be smaller than in the UK, the IMF said. “Ireland, Malta, Cyprus, Luxembourg, the Netherlands and Belgium would likely be most affected.”
The IMF’s reports on the UK had been scheduled for Friday but publication was delayed after the murder of Labour MP Jo Cox in West Yorkshire on Thursday.
The warnings about a substantial blow to economic growth follow an impassioned plea from the IMF’s managing director Christine Lagarde on Friday for Britain to remain in the EU .. https://www.theguardian.com/business/2016/jun/17/imf-chief-christine-lagarde-urges-britain-to-stay-in-europe .
In a speech in Vienna .. https://www.theguardian.com/business/2016/jun/16/bank-of-england-economy-will-be-hit-hard-if-britain-leaves-eu , Lagarde warned of a worrying rise in economic nationalism that threatened the union and urged policymakers to do more to reduce the inequality that made some Europeans “feel left behind”.
The fund’s latest comments on a possible Brexit echoed the Bank of England’s warning on Thursday that leaving the EU would risk pushing the pound sharply lower .. https://www.theguardian.com/business/2016/jun/16/bank-of-england-economy-will-be-hit-hard-if-britain-leaves-eu .. and sending shockwaves through the global economy.
https://www.theguardian.com/business/2016/jun/18/imf-says-brexit-would-trigger-uk-recession-eu-referendum
Meanwhile, posssibly, yet another ultra-conservative freak commits a tragic murder to draw attention to himself.
Jo Cox MP death: Police probe right-wing links to MP's killing
17 June 2016
VIDEO: David Cameron and Jeremy Corbyn laid flowers in tribute to Jo Cox in her constituency of Batley and Spen
Killing of MP Jo Cox
Jo Cox 'humanitarian with political nous' - http://www.bbc.com/news/uk-england-oxfordshire-36560974
Image gallery In pictures: Jo Cox tributes - http://www.bbc.com/news/uk-36555942
Obituary: Proud Yorkshire lass Jo Cox - http://www.bbc.com/news/uk-politics-36550919
Jo Cox MP: In her own words - http://www.bbc.com/news/uk-politics-36558302
Police investigating the killing of MP Jo Cox have said they are prioritising inquiries into the suspect's possible links to right-wing extremism.
Mrs Cox, 41, was shot and stabbed outside her constituency surgery in West Yorkshire on Thursday. A 52-year-old man has been arrested.
The BBC understands Nazi regalia was recovered at suspect Tommy Mair's home.
David Cameron and Jeremy Corbyn have described the killing as an "attack on democracy".
Live updates: Westminster reacts - http://www.bbc.co.uk/news/live/uk-politics-36454645
Flowers and candles have been laid in Parliament Square
Continued: http://www.bbc.com/news/uk-england-36560895
---
Consequences of Brexit sink in for US politicians after killing of MP
Dan Roberts and Ben Jacobs in Washington
Saturday 18 June 2016 04.46 AEST
The death of UK member of parliament sent a shock through Washington as the EU referendum vote could affect foreign policy and international relations
Barack Obama campaigned against the UK leaving the European Union when he
visited London in April. Photograph: Will Oliver/EPA
Dan Roberts and Ben Jacobs in Washington
Saturday 18 June 2016 04.46 AEST
Last modified on Saturday 18 June 2016 09.25 AEST
The shock felt in Washington at what Hillary Clinton called the “assassination” of British MP Jo Cox has coincided with a belated American realisation of just how febrile UK politics has become ahead of next Thursday’s vote on leaving the European Union.
While the US has been mourning victims of the Orlando shooting and digesting new extremes of anti-immigrant rhetoric from Donald Trump in response, the extent to which the European migration debate has driven the UK to brink of “Brexit” had gone less noticed.
“The recent [pro-Brexit] opinion polling is only just beginning to sink in here,” says one senior European diplomat trying, behind the scenes, to reassure Washington’s increasingly nervous foreign policy community about the future of the Atlantic alliance.
Previous White House intervention was focused on spelling out the cost of leaving the EU to British voters. Barack Obama hoped his trip to London last month – in which he described how the UK would be “at the back of the queue” for trade negotiations if it left – would help the prime minister, David Cameron, scare voters into staying put.
But despite similar dire warnings .. https://www.theguardian.com/business/2016/jun/17/imf-chief-christine-lagarde-urges-britain-to-stay-in-europe .. again this Friday from the International Monetary Fund head, Christine Lagarde, the steady swing of British opinion polling in favour of Brexit is raising concerns that it is not just the UK that stands to lose, but US foreign policy would also suffer greatly from a subsequently weakened Europe.
“Among the foreign policy elites there’s a consensus that the special relationship with Britain would become less special from the United States’ perspective if Britain isn’t influencing Europe,” says Fred Kempe, president of the Atlantic Council, a prominent Washington thinktank. “No doubt there is still going to be a great military relationship and trade etc, but in terms of solving global problems together it’s far better [for the US] to have Britain in.”
“Both the US and Europe view the UK as a transatlantic bridge,” added the Washington-based EU diplomat. “There is no European country that understands the US better than Britain, and no better explainer of the American view to Europe.”
There is also sympathy for the predicament that the UK find itself in. “There is an understanding that the European Union is a flawed place,” says Kempe. “But there is also a feeling that it would become more flawed without Britain in.”
One senior Japanese diplomat in Washington confided privately that while his government was bemoaning the impact of Brexit on Japan’s European-exporting car factories in Britain, he personally could understand the desire to reassert national sovereignty.
Among US politicians too, Brexit has become a somewhat partisan issue. While Democrats and many establishment Republicans share in collective angst over the security consequences of the UK leaving the EU, conservatives in the GOP have been far more sympathetic.
In a March interview, Republican presidential candidate Rand Paul argued that the United Kingdom should never have joined the EU. Ted Cruz has been agnostic on the subject, while condemning Obama’s visit to the UK to campaign against Brexit.
Most noticeably, presumptive Republican nominee Donald Trump has explicitly come out in support of UK withdrawal from the EU, linking British membership to “migration”.
“I think the migration has been a horrible thing for Europe,” Trump told Fox News in May. “A lot of that was pushed by the EU. I would say that they’re better off without it, personally, but I’m not making that as a recommendation. Just my feeling.”
But the extent to which populist anxiety about immigration is being stirred up on both sides of the Atlantic with unpredictable and possibly violent consequences is also causing growing alarm.
“It is critical that the United States and Britain, two of the world’s oldest and greatest democracies, stand together against hatred and violence,” said Clinton, in response to Thursday’s killing of a pro-immigration MP by an assailant allegedly shouting “Britain first”.
“This is how we must honor Jo Cox – by rejecting bigotry in all its forms and instead embracing, as she always did, everything that binds us together,” added the presumptive Democratic nominee.
“Her maiden speech in parliament celebrated the diversity of her beloved Yorkshire constituency, and passionately made the case that there is more that unites us than divides us. It is cruel and terrible that her life was cut short by a violent act of political intolerance.”
https://www.theguardian.com/us-news/2016/jun/17/us-politics-brexit-eu-referendum-jo-cox
"Anti-elite sentiment may lead to Brexit, warns PM's 'best friend'"
Annual report on the British economy predicts ‘negative and substantial’ effects if Britain left the EU
IMF chief Christine Lagarde speaks in Vienna about the consequences of a British
exit from the EU. Photograph: Georg Hochmuth/AFP/Getty Images
Katie Allen
Saturday 18 June 2016 09.00 AEST
Last modified on Saturday 18 June 2016 09.01 AEST
Leaving the EU would hit British living standards, stoke inflation and wipe up to 5.5% off GDP, the International Monetary Fund has warned with less than a week to go until the referendum.
The IMF used its annual report on the British economy to say Brexit would plunge the UK into recession next year and that it could see no economic advantage in leaving the EU.
Previous IMF interventions .. https://www.theguardian.com/business/2016/may/13/imf-warns-stock-market-crash-house-price-fall-eu-referendum-brexit .. have drawn an angry response from leave campaigners who have already said the fund should not interfere in the UK’s democratic process. The leave camp has also attacked its record on economic forecasting.
Responding to the latest IMF remarks, Matthew Elliott, chief executive of Vote Leave said: “The IMF has chosen to ignore the positive benefits of leaving the EU and instead focused only on the supposed negatives. If we vote leave, we can create 300,000 jobs by doing trade deals with fast growing economies across the globe. We can stop sending the £350m we pay Brussels every week. That is why it is safer to vote leave.”
The IMF said last month that Brexit could spark a stock market crash and a steep fall in house prices .. https://www.theguardian.com/business/2016/may/13/imf-warns-stock-market-crash-house-price-fall-eu-referendum-brexit . In Saturday’s report to conclude its annual assessment of Britain’s economy, it added that a leave vote would tie the UK up in trade negotiations that could drag on for years.
The resulting uncertainty would hit spending and financial markets, it said, estimating that even under a relatively benign scenario in which the UK negotiated a trade status similar to that between Norway and the EU, output would fall by 1.5% by 2019, compared with where it would be under continued EU membership.
It modelled a less favourable outlook, in which GDP would fall more steeply. “In the adverse scenario of long negotiations and a default to the trade rules of the World Trade Organisation, GDP plunges by 5.5% by 2019,” it said.
Under that scenario, the UK would fall into recession in 2017, IMF officials said. “The implication would be negative growth in 2017,” said one official briefing reporters in a conference call.
In a baseline scenario in which the UK remains in the EU, growth would be expected to recover in late 2016, as the effects of the referendum waned. But the IMF’s experts also forecast various threats to the UK economy beyond the closely fought vote.
They included Britain’s relatively weak trade position, with a record current account deficit last year .. https://www.theguardian.com/business/2016/mar/31/uk-economy-growth-record-trade-deficit . There was also uncertainty about the degree to which the UK’s poor productivity growth .. https://www.theguardian.com/business/2016/feb/18/uk-productivity-gap-widens-to-worst-level-since-records-began .. would recover and risks associated with the UK’s “buoyant” property market.
The IMF, which has warned of a slowdown in the global economy .. https://www.theguardian.com/business/2016/apr/17/imf-urges-spending-boost-growth , urged British policymakers to be on alert for economic shocks and even raised the prospect of a UK interest rate cut.
The report said: “In the event of protracted demand weakness and inflation undershooting, monetary and fiscal policies should be eased, taking into account the benefits and potential costs of such a move.
“Conversely, monetary tightening may need to be initiated earlier than currently envisaged if core inflation or wage growth in excess of productivity growth begins to rise sharply.”
In the near term, the main risk to Britain’s economy was next week’s referendum, the fund’s directors said. “While recognising that this choice is for UK voters to make and that their decisions will reflect both economic and non-economic factors, directors agreed that the net economic effects of leaving the EU would likely be negative and substantial,” they said in a press release accompanying the report.
“In the event of a vote to leave, directors recommended that policies be geared toward supporting stability and reducing uncertainty.”
Brexit would also hit neighbouring EU economies, though the impact would be smaller than in the UK, the IMF said. “Ireland, Malta, Cyprus, Luxembourg, the Netherlands and Belgium would likely be most affected.”
The IMF’s reports on the UK had been scheduled for Friday but publication was delayed after the murder of Labour MP Jo Cox in West Yorkshire on Thursday.
The warnings about a substantial blow to economic growth follow an impassioned plea from the IMF’s managing director Christine Lagarde on Friday for Britain to remain in the EU .. https://www.theguardian.com/business/2016/jun/17/imf-chief-christine-lagarde-urges-britain-to-stay-in-europe .
In a speech in Vienna .. https://www.theguardian.com/business/2016/jun/16/bank-of-england-economy-will-be-hit-hard-if-britain-leaves-eu , Lagarde warned of a worrying rise in economic nationalism that threatened the union and urged policymakers to do more to reduce the inequality that made some Europeans “feel left behind”.
The fund’s latest comments on a possible Brexit echoed the Bank of England’s warning on Thursday that leaving the EU would risk pushing the pound sharply lower .. https://www.theguardian.com/business/2016/jun/16/bank-of-england-economy-will-be-hit-hard-if-britain-leaves-eu .. and sending shockwaves through the global economy.
https://www.theguardian.com/business/2016/jun/18/imf-says-brexit-would-trigger-uk-recession-eu-referendum
Meanwhile, posssibly, yet another ultra-conservative freak commits a tragic murder to draw attention to himself.
Jo Cox MP death: Police probe right-wing links to MP's killing
17 June 2016
VIDEO: David Cameron and Jeremy Corbyn laid flowers in tribute to Jo Cox in her constituency of Batley and Spen
Killing of MP Jo Cox
Jo Cox 'humanitarian with political nous' - http://www.bbc.com/news/uk-england-oxfordshire-36560974
Image gallery In pictures: Jo Cox tributes - http://www.bbc.com/news/uk-36555942
Obituary: Proud Yorkshire lass Jo Cox - http://www.bbc.com/news/uk-politics-36550919
Jo Cox MP: In her own words - http://www.bbc.com/news/uk-politics-36558302
Police investigating the killing of MP Jo Cox have said they are prioritising inquiries into the suspect's possible links to right-wing extremism.
Mrs Cox, 41, was shot and stabbed outside her constituency surgery in West Yorkshire on Thursday. A 52-year-old man has been arrested.
The BBC understands Nazi regalia was recovered at suspect Tommy Mair's home.
David Cameron and Jeremy Corbyn have described the killing as an "attack on democracy".
Live updates: Westminster reacts - http://www.bbc.co.uk/news/live/uk-politics-36454645
Flowers and candles have been laid in Parliament Square
Continued: http://www.bbc.com/news/uk-england-36560895
---
Consequences of Brexit sink in for US politicians after killing of MP
Dan Roberts and Ben Jacobs in Washington
Saturday 18 June 2016 04.46 AEST
The death of UK member of parliament sent a shock through Washington as the EU referendum vote could affect foreign policy and international relations
Barack Obama campaigned against the UK leaving the European Union when he
visited London in April. Photograph: Will Oliver/EPA
Dan Roberts and Ben Jacobs in Washington
Saturday 18 June 2016 04.46 AEST
Last modified on Saturday 18 June 2016 09.25 AEST
The shock felt in Washington at what Hillary Clinton called the “assassination” of British MP Jo Cox has coincided with a belated American realisation of just how febrile UK politics has become ahead of next Thursday’s vote on leaving the European Union.
While the US has been mourning victims of the Orlando shooting and digesting new extremes of anti-immigrant rhetoric from Donald Trump in response, the extent to which the European migration debate has driven the UK to brink of “Brexit” had gone less noticed.
“The recent [pro-Brexit] opinion polling is only just beginning to sink in here,” says one senior European diplomat trying, behind the scenes, to reassure Washington’s increasingly nervous foreign policy community about the future of the Atlantic alliance.
Previous White House intervention was focused on spelling out the cost of leaving the EU to British voters. Barack Obama hoped his trip to London last month – in which he described how the UK would be “at the back of the queue” for trade negotiations if it left – would help the prime minister, David Cameron, scare voters into staying put.
But despite similar dire warnings .. https://www.theguardian.com/business/2016/jun/17/imf-chief-christine-lagarde-urges-britain-to-stay-in-europe .. again this Friday from the International Monetary Fund head, Christine Lagarde, the steady swing of British opinion polling in favour of Brexit is raising concerns that it is not just the UK that stands to lose, but US foreign policy would also suffer greatly from a subsequently weakened Europe.
“Among the foreign policy elites there’s a consensus that the special relationship with Britain would become less special from the United States’ perspective if Britain isn’t influencing Europe,” says Fred Kempe, president of the Atlantic Council, a prominent Washington thinktank. “No doubt there is still going to be a great military relationship and trade etc, but in terms of solving global problems together it’s far better [for the US] to have Britain in.”
“Both the US and Europe view the UK as a transatlantic bridge,” added the Washington-based EU diplomat. “There is no European country that understands the US better than Britain, and no better explainer of the American view to Europe.”
There is also sympathy for the predicament that the UK find itself in. “There is an understanding that the European Union is a flawed place,” says Kempe. “But there is also a feeling that it would become more flawed without Britain in.”
One senior Japanese diplomat in Washington confided privately that while his government was bemoaning the impact of Brexit on Japan’s European-exporting car factories in Britain, he personally could understand the desire to reassert national sovereignty.
Among US politicians too, Brexit has become a somewhat partisan issue. While Democrats and many establishment Republicans share in collective angst over the security consequences of the UK leaving the EU, conservatives in the GOP have been far more sympathetic.
In a March interview, Republican presidential candidate Rand Paul argued that the United Kingdom should never have joined the EU. Ted Cruz has been agnostic on the subject, while condemning Obama’s visit to the UK to campaign against Brexit.
Most noticeably, presumptive Republican nominee Donald Trump has explicitly come out in support of UK withdrawal from the EU, linking British membership to “migration”.
“I think the migration has been a horrible thing for Europe,” Trump told Fox News in May. “A lot of that was pushed by the EU. I would say that they’re better off without it, personally, but I’m not making that as a recommendation. Just my feeling.”
But the extent to which populist anxiety about immigration is being stirred up on both sides of the Atlantic with unpredictable and possibly violent consequences is also causing growing alarm.
“It is critical that the United States and Britain, two of the world’s oldest and greatest democracies, stand together against hatred and violence,” said Clinton, in response to Thursday’s killing of a pro-immigration MP by an assailant allegedly shouting “Britain first”.
“This is how we must honor Jo Cox – by rejecting bigotry in all its forms and instead embracing, as she always did, everything that binds us together,” added the presumptive Democratic nominee.
“Her maiden speech in parliament celebrated the diversity of her beloved Yorkshire constituency, and passionately made the case that there is more that unites us than divides us. It is cruel and terrible that her life was cut short by a violent act of political intolerance.”
https://www.theguardian.com/us-news/2016/jun/17/us-politics-brexit-eu-referendum-jo-cox
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
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