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Archive for May 13th, 2016
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Friday, May 13th, 2016IMF Brexit Warning: Should We Worry?
Friday, May 13th, 2016In a word yes. With manufacturing in recession, external debt still the second highest in the world and growth slowing, the UK economy is in no position to embark on an economic adventure into the unknown. The IMF is lined up with practically every financial organisation of importance in uttering dire warnings of a Brexit Yes.
The Leave campaign have only themselves to blame for this assault on their credibility, because they have failed to come up with a coherent programme, based on detailed research and credible investigations, which demonstrates a clear alternative which has every chance of working. These Leave people have been plotting for this moment for over a quarter of a century and it is hardly confidence inspiring to find them now clueless, reduced to calling all these world class institutions unreliable and mistaken.
Yet there is a key point which Leave appear to have missed. Most warnings include a sterling devaluation. If this were significant and big enough to damage asset values, increase the cost of imports by a margin that every shopper would notice and make UK manufactured goods cheap in world markets, it might just spark an economic reboot which could lead to prolonged growth and long term prosperity as a trading nation independent of blocks. Maybe the reason they dare not play the card is because the pain of the transformation would be acute. In a country with the highest level of household debt in Europe the pain might difficult for many to bear.