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Mortgage rates 'likely to go up' if Britain leaves EU, claims Osborne

Published 15/04/2016

Boris Johnson will spearhead the Brexit campaign with a series of speeches across the UK
Boris Johnson will spearhead the Brexit campaign with a series of speeches across the UK

Mortgage rates are likely to rise if Britain quits the European Union, the Chancellor has warned.

Families would be left "paying the price" of a Brexit as i nstability in financial markets pushed up the cost of repayments, George Osborne insisted.

Experts are "pretty clear" that prices would increase if voters choose to leave the 28-strong bloc in the June 23 referendum, he said.

The International Monetary Fund (IMF) earlier this week warned that quitting could inflict "severe regional and global damage" and downgraded its forecast for UK economic growth.

Mr Osborne, who is visiting the US, told Sky News: "If you look at the view of the experts here at the IMF in Washington it's pretty clear that if Britain votes to leave the EU then prices will go up and there will be instability in financial markets.

"What that means for families is that mortgage rates are likely to go up. In other words, it will be families paying the price if Britain votes to leave the EU and I think it's another reason why, frankly, we are stronger, safer and better off inside the European Union."

Matthew Elliott, chief executive of Vote Leave, said: " Less than 24 hours in and the pro-EU camp are already panicking - resorting to doing down the economy and people's mortgages to intimidate the British public into voting their way.

"The Chancellor is desperate not to talk about the NHS and the pressure it is under because of EU migration."

As campaigning ramped up, l eading Leave campaigner Boris Johnson said it would be "hypocritical" for US President Barack Obama to seek to use his upcoming visit to the UK to try to persuade Britain to stay in the European Union.

London's mayor told the Evening Standard: "I honestly don't mind the idea of him joining the debate.

"Where we do part company, and where I do mind, is that it is plainly hypocritical for America to urge us to sacrifice control - of our laws, our sovereignty, our money and our democracy - when they would not dream of ever doing the same."

Fellow Brexit campaigner Michael Gove insisted quitting the EU would free up more cash for the NHS as Vote Leave put the service centre stage. It claimed a large chunk of the UK's £10.6 billion net contribution to Brussels could be diverted to medical care if Britain quits the EU.

The Justice Secretary told Sky News: "If we stay in, if we vote to remain, then the European Union will press ahead with integration and it will drag us into that process.

"At the moment, the money we give to the European Union is spent by others, people that we have never elected, never chosen and can't remove.

"If that money is taken back, then that £50 million a day will be spent on British people's priorities and the NHS, of course, is top of the list."

Downing Street insisted that Brexit would mean "less money for the NHS", with Mr Cameron's official spokeswoman saying: "A strong NHS needs a strong economy and the Prime Minister has been very clear that our economy is stronger in the EU."

Health unions blasted Vote Leave's figures as "spurious and outrageously misleading", insisting the NHS's financial woes were made in Whitehall and not Brussels.

Unite national officer for health Barrie Brown said: "It defies belief to think that Boris Johnson and Michael Gove would do a massive political U-turn and divert billions of EU cash into the NHS - when they have supported real cuts to the NHS budget and been enthusiastic flag-wavers for the privatisation and break-up of the NHS."

TUC general secretary Frances O'Grady said: "The reality is that Brexit would plunge the NHS into a staffing crisis, which could lead to the longest hospital waiting lists we've ever known. And with experts warning that Brexit would hit Britain's economy, the consequences for NHS funding would be dire."

The Remain camp also wheeled out a big gun, with former chancellor Lord (Alistair) Darling accusing Brexit backers of offering Project Fantasy, as he warned that leaving would threaten Britain's economy.

In a speech in London, the Labour peer acknowledged that either side could win the EU contest.

"This is a very, very close vote. No one can predict with any certainty what is likely to happen," said the Labour peer.

"I hope we will win and I hope we will win well but we need to get the support of people the length and breadth of the country, no matter what their political allegiance has been in the past.

"We need every single vote. It is going to be very close. Every vote counts."

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