Warnings of Brexit Risks Overwhelm British Voters

In a plea to British voters to vote to stay in the group, many world leaders are citing the risks of Britain leaving the European Union.  Most recently, Bank of Japan Chief Haruhiko Kuroda warned that Britain leaving the EU would have a serious impact on the world’s economy and that it would hurt Japan. “This could be potentially quite serious. If Brexit is agreed, it would have a significant and serious impact on the global economy,” he said at the most recent G7 meeting in Japan.

In a plea to British voters to vote to stay in the group, many world leaders are citing the risks of Britain leaving the European Union.  Most recently, Bank of Japan Chief Haruhiko Kuroda warned that Britain leaving the EU would have a serious impact on the world’s economy and that it would hurt Japan. “This could be potentially quite serious. If Brexit is agreed, it would have a significant and serious impact on the global economy,” he said at the most recent G7 meeting in Japan.

The G7, which includes the UK, Japan, the U.S., France, Germany, Italy, and Canada, regularly meets to discuss political and economic issues facing the individual countries and the group in an attempt to improve relations and drive trade. While sometimes criticized for its exclusionary and secretive meetings, the G7 has also supported one another in major crises, such as the 2014 annexation of Crimea, in which the group removed Russia as a member.

Now the G7 is focused largely on Britain, as the impact of Britain leaving the EU is seen as a political risk to European nations—although the economic studies of a Brexit remain unclear and controversial.

IMF Warnings

Alongside the G7, the International Monetary Fund (IMF) has also warned that a Brexit could lead to several economic disasters, including a recession in England. IMF Chief Christine Lagarde said the Brexit would lead to a recession, repeating warnings that were made last week by Bank of England Governor Mark Carney.

However, the IMF’s report focuses less on technical economic effects of a Brexit and more on the signal it would send to the rest of the world. “A vote to leave the EU would create uncertainty about the nature of the UK’s long-term economic relationship with the EU and the rest of the world,” the report said.

The report also referred to unnamed studies that point to a severe economic disaster from a Brexit. “Most assessments point to sizable long-run losses in incomes, as increased barriers would reduce trade, investment, and productivity,” the report said. The report also noted that those studies see a 1.5% to 9% decline in Britain’s GDP due to leaving the EU, but the IMF failed to explain how the studies yielded such massive disparity in their estimates.

Meanwhile, Bank of England Governor Mark Carney has stepped up warnings to the British people that a Brexit would be a bad economic decision, and he quickly received support from British politicians. UK Chancellor George Osborne said Carney’s words were a “clear and unequivocal warning,” adding that a Brexit would create a “lose-lose” situation. “So either families would face lower incomes because inflation would be higher, or the economy would be weaker with a hit to jobs and livelihoods,” Osborne said.

The UK will have its referendum on whether to remain in the EU on June 23.