Britain faces long-term economic uncertainty and volatility in financial markets if it votes to leave the European Union in a referendum on June 23, the International Monetary Fund warned on Friday.
A British EU exit, or Brexit, carries "a significant downside risk" and the prospect of it happening is an international issue that causes "anxiety around the world," said Christine Lagarde, the IMF's managing director.
An IMF report on Britain's economic outlook said a Brexit would "precipitate a protracted period of heightened uncertainty, leading to financial market volatility and a hit to output." "The long-run effects on UK output and incomes would also likely be negative and substantial," the report said.
Chancellor of the Exchequer George Osborne said the IMF's analysis had "put to rest the fallacy that's been peddled by those who say Britain will have more money for public services if we're not paying into the EU budget." "The IMF are clear that even the prospect of a 'leave' vote is already having an impact on investment and hiring decisions, and weighing on economic growth in the UK," Osborne, the finance minister, said in a statement. "But the Fund are also clear that this could be a mere taste of things to come if we vote to leave," he said.
Osborne's Treasury Department issued an analysis last month saying an average British household would lose 4,300 pounds (6,200 dollars) annually if Britain leaves the EU, dpa reported.