The Brexit debate: The Treasury warns of a “do-it-yourself” recession after a Brexit vote

Posted: May 23, 2016 in economy
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The Brexit debate

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The Treasury says Brexit would be an economic disaster, but Brexiteers do not agree

THE government’s strategy for winning the referendum on Britain’s membership of the European Union has long been to focus on the risk that Brexit poses to the economy. A month ago George Osborne, the chancellor, published a long-term Treasury study which came up with a “central case” estimate that leaving the EU would make Britain’s GDP 6% smaller by 2030 than remaining would—a figure that he translated into an annual cost of £4,300 ($6,200) per household. Brexiteers sneered that Treasury forecasts were usually wrong and also pointed to the huge uncertainty in any attempt to look 15 years ahead.
Now Mr Osborne has fired a second shot at his opponents, with a Treasury paper on the short-term impact of Brexit that is, if anything, even gloomier. This new study considers three factors that it calls a transition effect, an uncertainty effect and a financial-conditions effect. …

via Economic Crisis


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