Redwood: This Alarmist Rhetoric is Ill Befitting of the Chancellor

Commenting on the Chancellor’s reaction to movements in the foreign exchange markets, John Redwood MP said:

‘This alarmist rhetoric is ill befitting of the Chancellor – and betrays a growing desperation in Number 10.

‘Any serious economist will tell you that the pound is up against the dollar since February, and the UK’s foreign exchange reserves have increased this year.

‘We are the fifth largest economy in the world, and will fare perfectly well outside of the EU – as the Prime Minister himself acknowledged. In fact, the economic health of this country will increase when we detach ourselves from the perilous state of the Eurozone.’

• Sterling is higher against the dollar than when the referendum was called.

• The UK’s foreign exchange reserves are increasing..

• The Governor of the Bank of England has admitted the risks from China are greater and that there are risks to remaining in the EU.

• The Prime Minister has acknowledged the UK could succeed outside the EU.

Sterling is higher against the dollar than when the referendum was called.

Sterling is currently trading at 1.4591$/£, up from 1.4406$/£ on 19 February.

The UK’s foreign exchange reserves are increasing.

The UK Government’s international reserves in May 2016 were $140.0 billion, up from $130.4 billion in December. In May 2015, they were $122.4 billion.

The Governor of the Bank of England has admitted the risks from China are greater and that there are risks to remaining in the EU.

The Governor of the Bank of England, Dr Mark Carney, has said: ‘In my judgement, the global risks, including from China, are bigger than the domestic risks’.

The Governor has said: ‘we do think that there are risks of remaining in the European Union’, and that these manifested themselves ‘in particular, in relation to the development of the euro area. The Governor affirmed this statement, noting: ‘UK membership of the European Union brings risks‘.

The Governor assessed the chance of a fiscal union being created in the Eurozone: as ‘less than 5’ out of ten, suggesting the Euro area will remain permanently unstable.

The former Governor of the Bank of England, Lord King of Lothbury, recently warned that the Eurozone ‘might explode‘.

The Prime Minister has acknowledged the UK could succeed outside the EU.

The Prime Minister has said: ‘I am not saying for one moment that Britain couldn’t survive outside the European Union. Of course we could. We are a great country. The fifth largest economy in the world. The fastest growing economy in the G7 last year. The biggest destination for foreign direct investment in the EU. Our capital city a global icon. The world, literally, speaks our language. Last month the President of China spent a week in this country. This week the Prime Minister of India will visit. They see a great future for this country that we all love. No one doubts that Britain is a proud, successful thriving country. A nation that has turned round its fortunes though [sic] its own efforts. A far cry from the “sick man of Europe” at the time we entered the European Economic Community 4 decades ago. Whether we could be successful outside the European Union – that’s not the question’.

The Prime Minister, David Cameron, has admitted: ‘If we were outside the EU altogether, we’d still be trading with all these European countries, of course we would … Of course the trading would go on … There’s a lot of scaremongering on all sides of this debate. Of course the trading would go on‘.

Even the Head of the IN campaign, Lord Rose of Monewden, has admitted that ‘nothing is going to happen if we come out of Europe… It’s not going to be a step change or somebody’s going to turn the lights out and we’re all suddenly going to find that we can’t go to France, it’s going to be a gentle process’.