Business Planning

George Osborne warns of year-long recession? in event of Brexit

Fred Heritage | 23 May 2016 | 8 years ago

Osborne
George Osborne: “Can Britain knowingly vote for a recession
Leaving the European Union (EU) would plunge Britain into a year-long recession, chancellor George Osborne has warned.

Backed by analysis from the Treasury, which argued that leaving the EU would cause an immediate and profound shock? to Britain that would damage economic growth, the chancellor stepped up the government’s campaign opposing Brexit, exactly one month away from the vital referendum.

The Treasury predicted two likely scenarios should voters choose to leave the EU on 23 June. A ‘shock? scenario in which UK gross domestic product (GDP) would be 3.6 per cent lower than it otherwise would have been after two years, and a ‘severe shock? scenario, in which GDP would be six per cent lower.

The analysis also concluded that a Brexit would result in the loss of 500, 000 UK jobs and a fall in the value of the pound by around 12 per cent. Inflation would increase by more than two per cent, whilst the value of people’s homes would be hit by ten per cent compared to Britain remaining part of the EU.

In a statement accompanying the Treasury’s analysis, Osborne said: The British people must ask themselves this question: can we knowingly vote for a recession

George Osborne and David Cameron have been accused by some commentators in recent months of ‘scare tactics? over Brexit, with this announcement the latest in a series of stark government warnings of the risks posed by leaving the EU.

Another recent Treasury assessment of the long-term impacts of a Brexit, for example, found that Britain would be permanently poorer. It suggested that GDP would be 4, 300 lower for every household after 15 years and every year thereafter.

As a result, campaigners voting to leave the EU are likely to discount Osborne’s warnings and question the accuracy of the Treasury’s predictions. Former Conservative party leader and campaigner for Brexit, Ian Duncan Smith, has dismissed the Treasury’s findings as not an accurate assessment.

Duncan Smith added: The Treasury has consistently got it 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.

Osborne’s announcement comes amid signs that Britain’s small business owners are increasingly apprehensive about the impact Brexit would have on their business. Recent research published by accountants Smith & Williamson revealed that more than 80 per cent of owners believed Brexit would negatively impact on their firm.

However, recent polling by Business Advice found Britain’s small business owners to be mostly undeterred by the uncertainty surrounding the looming Brexit vote. Some 70 per cent of small and micro business managers disagreed with the statement that uncertainty was stopping them from making decisions on the future of their small business.

The latest polling of the population more broadly suggests that Britain is deeply divided on the issue of continued European membership.

The BBC recently found that young people are mostly in favour of remaining a part of the EU, with nearly three-quarters of under-25s backing a vote to stay. The older someone is, the more likely they are to want to leave. Amongst over-65’s, for example, three in five wish to leave the bloc.

In terms of gender, men are statistically only slightly more likely to want to leave the EU than women 48 per cent of men were recently found to be planning on voting to leave in the referendum, as opposed to 46 per cent of women.

Related Topics

How Businesses Can Save on Their Energy Costs This Winter
28 September 2023

How Businesses Can Save on Their Energy Costs This Winter

Read More →
The Importance of Data Analytics in Making Informed Business Decisions
14 September 2023

The Importance of Data Analytics in Making Informed Business Decisions

Read More →
How to Write a Business Plan That Investors Will Love
13 September 2023

How to Write a Business Plan That Investors Will Love

Read More →
Performance Appraisals Reimagined, How to Modernise Your HR Reviews
4 September 2023

Performance Appraisals Reimagined, How to Modernise Your HR Reviews

Read More →
Embracing Sustainability: Eco-Friendly Practices for Businesses
1 September 2023

Embracing Sustainability: Eco-Friendly Practices for Businesses

Read More →
Eco-Friendly Sustainable Business Practices
8 August 2023

Eco-Friendly Sustainable Business Practices

Read More →

If you enjoy reading our articles,
why not sign up for our newsletter?

We commit to just delivering high-quality material that is specially crafted for our audience.

Join Our Newsletter