Is the IMF 'consistently wrong'?
Supporters of a British exit from the European Union were left enraged this week after a new report by the International Monetary Fund (IMF) led to calls of inaccuracy and political bias.
The Washington D.C.-based organization said the U.K. referendum on its membership of the EU had already created uncertainty for investors and said a so-called "Brexit" could do "severe regional and global damage by disrupting established trading relationships."
U.K. Prime Minister Cameron and Finance Minister George Osborne both used their Twitter accounts Tuesday to promote the IMF's latest assessment with the latter calling it "one of most important interventions yet in EU debate."
Bookmaker Ladbrokes is currently predicting there's a 33 percent chance that Britons will vote to leave the European bloc in an upcoming referendum on June 23. The fierce debate has strained relationships and seen major political heavyweights put forward opposing views.
The warning - just weeks before the June 23 vote - was heavily criticized by John Longworth, a former director-general of the British Chambers of Commerce, who resigned from his role in March after being drawn into the political row.
The British government is officially campaigning to stay within a renegotiated EU and Longworth claimed that it had "friends in high places" with this latest backing by the IMF. The IMF did not respond immediately when asked by CNBC about claims of bias and inaccuracy.
"I'm fully expecting a whole series of international organizations to make comments saying we ought to stay in the European Union running up to the 23rd of June, no doubt orchestrated by the U.K. government," Longworth told CNBC Wednesday.
"They (the IMF) didn't predict the (U.K.) recession, they are certainly part of the EU establishment," he added.
Paul Gambles, the managing director of MBMG Group, was equally scathing, saying the organization had "zero credibility" and had now come out with a "very prejudiced viewpoint" on the U.K.'s future within the European bloc.
Meanwhile, Ngaire Woods, the founding dean of the Blavatnik School of Government and professor of global economic governance at the University of Oxford, gave a different perspective on the IMF report released on Tuesday. Woods - who has served as an advisor to the IMF board - responded to its decision to downgrade global growth Tuesday and said the organization was "almost always over optimistic." In an interview with the BBC on Wednesday morning she called it a "sobering report."
In January, analysts at Credit Suisse said a "Brexit" would result in an "immediate and simultaneous economic and financial shock for the U.K." It added that it could see a drop in business investment, hiring and confidence. The CBI (Confederation of British Industry) released independent research in April showing it could cost the economy £100 billion ($142 billion) and 950,000 jobs by 2020.
Meanwhile, the "leave" campaign point to pressures on the U.K.'s state-run national health service, the threat of terrorism and the costs of EU membership. The current concerns over the country's steel industry has added more fuel to the debate with some claiming tight EU regulations has limited the government's response. In a statement on Wednesday, the Vote Leave campaign said the IMF had talked down the U.K.'s economy before and has been "consistently wrong in past forecasts about the U.K. and other countries."
"We have a much brighter future outside of the European Union but it took me awhile to come to that conclusion. In an uncertain world if you want certainty the very best way to have it is to take control of you own affairs," Longworth told CNBC Wednesday.