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IMF spell out series of bleak warnings about Brexit
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Impact from ‘pretty bad to very bad’
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Bombshell report to come out days before vote
- Jeremy Corbyn heads to Liverpool to sign up voters
Summary of IMF warnings and backlash
By Steven Swinford and Szu Ping-Chan
The International Monetary Fund has been accused of trying to "bully" British voters into staying in the EU after it pledged to publish a report warning of the risk of a Brexit on the eve of the EU referendum.
Christine Lagarde, the head of the IMF, said yesterday that a vote to leave the EU would have "pretty bad to very, very bad consequences" and could lead to a recession.
She said that a Brexit will lead to would lead to a stock market crash and a steep fall in house prices as she pledged to publish a more detailed analysis a week before the referendum on June 23.
She defended the decision to intervene on the eve of the referendum campaign despite having delayed a report ahead of the General Election amid concerns it would impact on the result.
Priti Patel, the eurosceptic employment minister, accused George Osborne of encouraging the IMF to "bully" the British people.
She said: "The IMF warned Britain it was playing with fire when it set out a plan to deal with the deficit. "Now our economy is stronger than nearly every other major economy.
"Today, the IMF is talking down Britain because we want to take back control from Brussels. They were wrong then and they are wrong now.
"The EU-funded IMF should not interfere in our democratic debate a week before polling day.
"It appears the Chancellor is cashing in favours to Ms Lagarde in order to encourage the IMF to bully the British people – it is a sign of the desperation in the IN campaign."
Mrs Lagarde said she had "not seen anything that's positive" about Brexit and warned that it could "lead to a technical recession".
She said that a Brexit could have a "negative and substantial effect" and lead to "severe regional and global damage". She insisted that she had a duty to assess the risks of a Brexit.
When asked whether the Treasury had an input into the report, she replied: "heck no".
In its report the IMF said that a Brexit vote would result in a "protracted period of heightened uncertainty" and could result in a sharp rise in interest rates.
London's status as a "global financial centre" would be at risk of being "eroded", the report said. The IMF suggested that concerns about a Brexit may have affected UK markets in recent months, according to the IMF.
It pointed to a 40 per cent decline in the number of commercial real estate transactions in the first three months of the year.
The Chancellor: "The IMF also put to rest the fallacy that has been peddled by those who say Britain will have more money for public services if we are not paying into the EU budget.
"The IMF are very clear today - the hit to growth we could expect from a vote to leave would cost our public finances more than the amount we would gain from no longer contributing to the EU budget."
However Lord Lamont, the former conservative Chancellor who is campaigning for a Brexit, said: "This daily avalanche of institutional propaganda is becoming ludicrous and pitiful. Important institutions are being politicised and used to make blood-curdling forecasts.
"There are plenty of respected individual economists, plenty of respected professional investors, and plenty of entrepreneurs who take a very different view from Christine Lagarde and who have probably been better at foreseeing the future than the IMF."