Belfast Telegraph

Home Business Brexit

Cameron and Osborne issue stark economic warnings over consequences of Brexit

By Sam Lister and Hannah Stubbs

Family shopping bills are set to rise by £220 a year if Britain quits the European Union, David Cameron has warned.

And quitting the European Union would plunge Britain into a year-long recession, Chancellor George Osborne said.

A vote to leave would mean the average family shelling out an extra £120 a year on food and drink, the Prime Minister said.

An extra £100 is likely to go on increased clothing and footwear costs, fuelled by a fall in sterling, according to Treasury analysis.

Mr Cameron said: "This analysis makes absolutely clear that British families are better off remaining in a reformed European Union. 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.

"This isn't about dry economics; this is about the economic security of hard-working families in Britain. Families are better off voting to remain in the EU - the alternative is a leap in the dark that would risk prosperity and security."

A fall in sterling of more than 10% predicted to be caused by Brexit would put upward pressure on the price of imports, pushing up the cost of everyday items by more than £220 for a family of four after two years, according to the Treasury.

Asda president Andy Clarke said: "A vote to leave represents uncertainty, including on prices. That is why our position in this debate has been clear from the outset - Britain should remain within the EU."

Former chief executive of Waitrose Mark Price said: "As a former head of Waitrose, I know the retail sector inside and out. It's clear that leaving the EU will see further pressure on the pound, which will mean higher prices for consumers."

Quitting the 28-member bloc would send prices in the shops rocketing and risk a spike in inflation, job losses and a plunging pound, other leading high street bosses have claimed.

Former chiefs of Tesco, Sainsbury's, Marks & Spencer and B&Q warned that leaving could have a "catastrophic" impact on the economy.

In an article for the Mail on Sunday they said: "We believe an exit could be catastrophic for the consumer recovery on which so much of our economic stability depends.

"It is impossible to see how there could be an exit without an impact on prices and inflation. The unintended consequences of a Leave vote and the uncertainty it would create would be a massive shock to the system."

Other EU countries could "exploit" exit negotiations for their own benefit, they warned.

"It's difficult to imagine that French farmers will continue to allow British lamb to be freely imported," they said.

Meanwhile, a Treasury analysis released by the Chancellor suggested the UK would suffer an "immediate and profound" economic shock following a vote to leave that would be made worse by the negotiations that followed. It shows that economic growth would be at least 3.6% lower following a Brexit win in the June 23 referendum, but could plummet as much as 6%.

Belfast Telegraph