Brexit would Trigger ‘Economic and Financial Shock’ to UK


    A research article in the prestigious The Lancet medical journal has found that Brexit would trigger an ‘economic and financial shock’ to the UK, which could in turn have an impact in many months to come.

    The journal is a weekly peer-reviewed general medical journal, first published on 22 October 1823. One of its goals is to “provide a forum for the international medical community” with “rapid publication of authoritative articles.”

    In the article, Professor Martin McKee from London School of Hygiene & Tropical Medicine and colleagues argue that a ‘leave’ vote will have profound implications for health care in the UK. They suggest this should be a key issue in a referendum campaign dominated by issues such as immigration and welfare payments.

    The authors say: “How a vote to leave would affect the NHS is a major issue in the referendum debate. Former secretary of state for health and current leader of the “Vote Leave” campaign, Boris Johnson, has suggested that a large financial saving will result from leaving the EU, which could then be spent on healthcare. But others have argued that economic turbulence as a result of leaving will be hugely damaging.”

    They add: “The economic and financial shock following a vote to leave would almost certainly precipitate an immediate recession in the UK, with potential effects on taxation revenue and social care budgets. Rising unemployment would increase NHS demands for healthcare, including mental health services. A decline in funding of more than £20 billion a year by 2018-19 would be required to return the NHS budget to 2015-16 levels in real terms.”

    The authors argue that an economic crisis triggered by Brexit could cause a collapse of the exchange rate leading to severe dislocations for many export industries, as well as automotive and financial services. They say that the borrowing costs for businesses and consumers would be expected to rise as a result, as well as putting greater pressure on social services such as the NHS.

    They add: “With an ageing population and increasing life expectancy, health care makes up about 10% of public spending and so could face at least a 10% reduction in funding should the UK economy enter a recession. 

    If the NHS budget is held at 2015-16 levels in real terms, this would require an additional £2.8 billion annually by 2018-19 to be found for health and social care if other public services are not to be cut further than they already have been.”

    They conclude that economic contraction and possible lower tax revenues will make such a rescue package extremely difficult, and the health care sector could well be forced to take a substantial share of any cuts in public spending.

    Meanwhile, research published today by The Independent has found that the EU referendum is dominating conversations on Twitter – but immigration is still top of mind for many voters.

    The study, by researchers at the Oxford Internet Institute, looked at more than 17 million tweets sent between 29 May 2015 and 23 Feb 2016. It found that EU membership was mentioned in almost one-third of them – far more than any other topic.

    However, it also found that immigration is the most common secondary topic of conversation surrounding the referendum. Many of the most retweeted messages on the subject centre on immigration, with tweets from “@David_Cameron” and @Number10gov among the top most shared.

    In a separate study also published today, researchers from King’s College London have used Twitter to pinpoint Leave and Remain voters across the UK.

    Using a social media app called “Election Path”, they monitored the number of times users in each local authority area had tweeted about either Leave or Remain since December 2015.

    They found that Remain voters tended to live in urban areas, while Leave supporters were more likely to be from rural parts of England and Wales – with the exception of Cornwall and parts of Lincolnshire.

    The researchers also found that Twitter users who had changed their profile picture to include a party logo were more likely to be Remain supporters, suggesting they may give greater prominence to this issue when tweeting about it.

    Finally, research published by the Centre for Economic Performance (CEP) today has found that people are very wrong about how much they contribute to the Treasury, and what proportion of their taxes goes towards things like health care.

    The study, which quizzed 3,000 UK citizens on how much tax they pay each year, found that most people overestimate their contribution – with men more likely to do so than women.

    It also found that people dramatically underestimate what is spent on public goods such as health care and education. They put the share of the public budget going towards these items at 39 per cent, when in fact it makes up around half of public spending.

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