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Sunday, December 13, 2015

Why Cameron's European referendum is threatening our economic recovery

If there is one thing business does not like it is uncertainty. That is why the warning by IMF managing director Christine Lagarde, that uncertainty over Britain's membership of the European Union is putting the UK's economic recovery at risk,should be heeded.

Her annual report on the state of the UK economy makes clear that this uncertainty needs to be resolved:

She said the UK economy had made "considerable progress" since the 2008 financial crash, but warned there remained "uncertainties" which endangered the UK's economic recovery over the next few years. 

Her report stated: "The presumed recovery of productivity growth to nearer its historical average rate, which is essential to ensure that the growth of output and incomes remains solid, may fail to materialise.

"In addition, uncertainty associated with the outcome of the planned referendum on EU membership could weigh on the outlook."

The Independent reveals that the date of the EU referendum is now unlikely to be held before next autumn at the earliest because the Government must give four months' notice and will not set a date before securing a deal with EU leaders.

That does not bode well for business confidence.
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