Claims that Brexit would lead to economic meltdown are greatly exaggerated, a senior economist has said.
Roger Bootle, a former Group Chief Economist for HSBC bank, said that recent figures from the Treasury suggesting a new recession if Britain votes to leave the European Union (EU) should be treated with a healthy dose of scepticism.
Speaking to Bloomberg, Mr Bootle said that economists should be “modest” when making forecasts, adding that he was “astonished” the Treasury had “come out with these precise figures.”
“It would be funny if it were not so important,” he said.
Asked what he thought would happen after Brexit, he responded: “Really, we don’t know. There is an enormous range, and there is a positive range.
“My own guess is that after we actually left the EU there would be a period during which not very much would happen. Most of life would continue [as it had done before].”
Britain’s economic growth has slowed down in recent months, something the Remain camp have blamed on the referendum. However, Mr Bootle said there were all sorts of other reasons why there may be weakness in the UK economy, pointing out the US economy was also weak during the first quarter of 2016.
He also rubbished idea what Britain could not survive outside the EU, adding that if Britain could not arrange a trade deal with Brussels, UK manufacturers would have to pay a four per cent tariff to export to the single market, a figure which is “not a game changer”.
“Already the pound has fallen by more than that this year,” he said.
Last month, a senior German economist also said that Brexit would not be an economic disaster, and could in fact lead to a “booming Britain”.
Martin Hüfner, a former Chief Economist at Germany’s second largest bank HVB, said markets would adapt to new circumstances, and the City of London would still be Europe’s premier financial centre due to “The good people who work there, the English language and the geographical proximity to New York.”