IMF to warn of Brexit dangers

A row has developed over the Bank of England's latest report which said a euro exit would hurt the British economy

The IMF will today hit out at Britain's possible exit from the European Union in a report of its annual assessment of the UK economy.

The report will be presented by Managing Director Christine Lagarde at the Treasury this morning alongside Chancellor George Osborne.

It comes hours after the Bank of England surprised many by firmly indicating it has concerns about the economic consequences of a vote to leave the EU.

Leave campaigners have hit back at the Bank's Governor Mark Carney, including Tory MP Jacob Rees-Mogg and member of the Treasury Select Committee, who called for Governor Carney to be fired.

Mr Rees-Mogg told Sky News: "Mark Carney has intervened speculatively in a political matter.

"It's the responsibility of the Monetary Policy Committee to be independent and he's decided to make a deeply political choice in a referendum which is the concern of the British people and therefore he should be fired."

Governor Carney warned that growth could be materially lower, and prices and unemployment higher if Britain votes to leave.

The Bank's Inflation Report warned of a "perhaps sharp" slide in sterling after a Leave vote and funding problems in government and corporate bond markets, and for bank funding.

The Bank also calculated that the referendum was already impacting on growth, downgrading Q2 growth to 0.3%, its lowest rate since 2012.

The report, the combined calculation of nine members of the Monetary Policy Committee, including four independent economists, estimated that one-half of the 9% fall in the pound since November was attributable to the Brexit referendum.

Speaking to Sky News, the Governor justified his intervention, saying that to "suppress" the Bank's calculation would have been the real form of political interference.