British government report warns of economic risk of Brexit

An official British government report will outline the likely short-term economic impact of leaving the European Union, warning of higher food prices, a tumbling pound and lower economic growth.

The treasury report, out on Monday, comes exactly a month ahead of the referendum on Britain’s EU membership and just days before the imposition of “purdah”, after which the machinery of government can no longer be used to promote the Remain campaign.

David Cameron said an average family's shopping bill could increase by £220 (€284) a year because a weaker pound would push up prices in the shops.

“Independent studies show that a vote to leave would hit the value of the pound, making imports more expensive and raising prices in the shops,” he told ITV. “The reason why our economy would be less well off is relatively straightforward – we are part of a market of 500 million, the leave campaign want us to come out of that market . . . that will make us poorer as a country.”

Shift of focus

The prime minister will welcome a shift of focus onto the economy after a weekend when the debate has centred on immigration, the Leave campaign’s strongest issue.

Mr Cameron came close to accusing his armed forces minister Penny Mordaunt of lying after she claimed that Britain would be unable to veto Turkey joining the EU.

Ms Mordaunt claimed that the EU's reliance on Turkey's help in dealing with the migration crisis would make Ankara's application for EU membership impossible to resist.

“She is absolutely wrong. Let me be clear, Britain and every other country in the EU has a veto on another country joining. That is a fact,” he said.

“The fact that the leave campaign are getting things as straightforward as this wrong should call into judgment the bigger argument about leaving the EU.”

The Leave campaign pointed out that Mr Cameron has expressed support for Turkey joining the EU, telling an audience in Ankara in 2010 that “together I want us to pave the road from Ankara to Brussels”.

Struggling

The clash over immigration comes as opinion polls suggest the Leave campaign is struggling, with almost all showing the Remain side ahead and most showing Remain extending its lead. An opinion poll for the

Observer

on Sunday showed more Conservative voters backing Remain rather than Leave, a reversal of the position in early April. Now, 48 per cent of Conservative supporters say they want to remain in the EU, compared with 41 per cent who want to leave.

Recent polls suggest the Remain side is winning the argument on the economic impact of Brexit, and that voters regard the economy as the most important issue in the referendum. Immigration remains the strongest issue for the Leave side, although some polls indicate that the issue is diminishing in importance for voters as the campaign progresses.

The Leave side’s greatest advantage is in likely turnout, as voters who want to leave the EU, who are generally older, are more likely to say they will definitely vote on June 23rd.