Pound rallies as IMF and Bill Gates join Brexit debate

The head of the International Monetary Fund Christine Lagarde yesterday warned the UK of the risks of leaving the EU and said there was a clear economic argument for remaining part of the bloc.

EU membership has brought jobs and income gains to Britain and helped to make the country a “dynamic and vibrant economy,” Ms Lagarde said in a speech in Vienna, Austria.

European integration has lifted trade and investment and raised productivity and incomes, she said.

“We have already been on record that the economic risks of leaving are firmly to the downside,” Ms Lagarde said.

“There is, in my view, a clear case as to how the UK has benefited and will continue to benefit from its membership in the European Union,” she said.

Ms Lagarde’s warning reiterates the message contained in an IMF report last month which warned Brexit could lead to a “protracted period of heightened uncertainty,” triggering financial-market volatility and hurting economic output.

The fund also warned it could erode London’s position as a financial centre and cause “sharp” falls in house and equity prices.

Acknowledging that refugee and migration issues play an important role in the Brexit debate, Ms Lagarde urged British voters remain open to immigrants and the role they play in the economy and society.

“I have always admired the UK for its openness to other nationalities and foreign cultures, and I find it hard to believe that attitudes have changed in such a short time. Membership in the EU has made the UK a richer economy, but it has also made it a more diverse, more exciting, and more creative country,” she said.

UK banking giant, Citi yesterday said it still expected Britons to vote to stay in the EU in next week’s referendum, despite increased momentum for the ‘Leave’ campaign.

Sterling climbed yesterday as referendum campaigning was suspended for a second day — after the murder of MP Jo Cox — and an opinion poll on voter intentions was delayed.

The IMF also delayed, by 24 hours, the publication of a detailed report on the implications of Brexit.

The pound rose 0.4% to $1.4266 in the late afternoon after falling to $1.4013 on Thursday, the lowest level since April 6. Sterling also strengthened 0.2% to 78.88p per euro.

Meanwhile, multi-billionaire businessman and the world’s wealthiest man, Bill Gates, entered the Brexit debate yesterday, saying Britain would be a “significantly less attractive place to do business and invest” if it were to leave the EU.

In a letter to The Times, Mr Gates — who has invested more than $1bn into the UK — said Britain would be “stronger, more prosperous and more influential” inside the EU.

He said Britain’s EU membership and access to the single market played a role in the decision to locate the Bill and Melinda Gates Foundation’s research facilities in Cambridge.

Meanwhile, British companies are preparing for the possibility that the country will vote to leave the EU with extra funds, pre-written statements and plans for late-night vigils by teams of consultants.

In the final week before the referendum, the prospect of a ‘Leave’ vote has come into sharp focus, prompting a last-minute flurry of preparations.

Much of the focus is on how to assure customers, employees and investors that there will be near-term business continuity in the event of an ‘Out’ vote.

Bill Gates: #Brexit would make UK significantly less attractive for business #EUref https://t.co/H9ehbrdKhM pic.twitter.com/XnjAtp9kGZ

— PA Media (@PA) June 17, 2016