George Osborne’s stark Brexit alert weighs on sterling

British finance minister George Osborne told voters that leaving the EU would cost each household thousands of pounds a year and sap funding for public services because it would do permanent damage to the country’s economy.

Sterling fell to 79.69 pence against the euro at one stage yesterday, having touched 79.94 earlier, the weakest level since April 12.

The falls for sterling — which is down 14% since late last year — have dented price margins for many Irish firms exporting into Britain.

In a move likely to grab the attention of many UK voters, who remain split on whether to stay in the bloc, Mr Osborne pointed to his own UK Treasury figures which said breaking away could cost each household £4,300 (€5,409) a year by 2030.

Three days after official campaigning began for the EU membership referendum on June 23, Mr Osborne said all alternatives to staying in the union would leave Britain’s economy smaller than if it stayed in the world’s biggest trading bloc.

Anti-EU campaigners dismissed the Treasury’s estimates as worthless, but Osborne sought to hammer home his message that a Brexit would be felt by ordinary people.

“Britain would be permanently poorer if it left the European Union,” said Mr Osborne in a speech at a research centre specialising in the aerospace industry which has deep EU ties. “Under any alternative, we’d trade less, do less business and receive less investment.

“And the price would be paid by British families. Wages would be lower and prices would be higher.”

Most opinion polls show the rival campaigns running neck and neck, although one published yesterday showed the ‘Remain’ campaign had kept a seven percentage-point lead.

Another poll last week showed just how sensitive voters are to what a Brexit meant for their own finances.

Pollster YouGov said respondents who were evenly split shifted to 45-36 split in favour of staying in the EU if they were told that the cost of a Brexit for them would be £100 a year.

Brexit supporters accuse the British government of running a scare campaign.

They say a post-EU Britain would flourish as it pursued its own trade deals and dropped rules and regulations.

Mr Osborne tried to dismantle those arguments yesterday, saying that even the least disruptive Brexit option for Britain studied by his ministry — a deal with the EU similar to Norway’s access to the single market — would mean the economy would be nearly 4% smaller by 2030 than if it stayed in.

One of the leading ‘Out’ campaigners, London ,ayor Boris Johnson, has sketched out a different future for Britain, citing the trade deal reached by Canada with the bloc which could free Britain from contributing to the EU budget and end its obligation to keep its borders open to all EU workers.

Mr Osborne, a rival of Mr Johnson’s for the future leadership of the Tory Party, said such a deal would not cover Britain’s services industry and would leave the economy 6% smaller by 2030, or £4,300 per household.

That would cut government tax revenues by £36bn a year, or the same as its security and justice budgets combined, he said.

Bank of England governor Mark Carney, who has said Britain’s economy has benefited from being in the EU, is due to speak in the British parliament today.

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