[LONDON] The Organization for Economic Cooperation and Development became the latest international body to warn the UK that leaving the European Unionwould cause lasting damage to the economy, earning rebukes from campaigners for a so-called Brexit.
Britain would be hit by tighter financial conditions, weaker confidence, higher trade barriers and restrictions on labor mobility, according to an OECD report published Wednesday in London. By 2020, the OECD says gross domestic product would be more than 3 per cent smaller than with continued EU membership, which it calculates is equivalent to a cost of 2,200 pounds (US$3,200) per household. By 2030, GDP would be 5 per cent lower, equivalent to 3,200 pounds.
"Brexit would harm the economy to a considerable extent," the organization said. It would be "akin to a tax on GDP, imposing a persistent and rising cost on the economy that would not be incurred if the UK remained."
The OECD report joins a chorus of warnings about the impact Brexit would have on both domestic and European growth. The Bank of Englandcalled it the biggest risk to domestic financial stability, with policy makers saying the June 23 referendum is already weighing on growth. The International Monetary Fund said this month that it was concerned about the "severe" damage a vote to leave could inflict, while the World Bank has cautioned that the global economy won't cope well with the increased uncertainty surrounding the decision.
Vote Leave campaign spokesman Robert Oxley rejected the OECD's "doom-laden predictions," accusing it of being consistently wrong on the EU. UK Independence Party leader Nigel Farage described the institution on BBC radio of being "stuffed with people who failed in politics." The report comes amid signs the British economy is already losing momentum. It expanded 0.4 per cent in the first quarter, matching the weakest pace of growth since the end of 2012, data showed.
"It's good news that Britain continues to grow, but there are warnings today that the threat of leaving the EU is weighing on our economy," Chancellor of the Exchequer George Osborne, who is campaigning to remain in the 28-nation bloc, said in a statement. "Investments and building are being delayed, and another group of international experts, the OECD, confirms British families would be worse off if we leave the EU."