Osborne Says Pent-Up Investment to Boom If U.K. Stays in EU

  • Chancellor agrees that referendum has hurt business confidence
  • Says delayed decisions will go ahead if Brexit rejected

Chancellor of the Exchequer George Osborne acknowledged that next month’s referendum on leaving the European Union had caused businesses to delay investment in the U.K., but said that money would come back in -- so long as people vote to stay in the bloc.

“There will be quite a strong snap back,” Osborne told an audience of business leaders in London on Monday. “Decisions that have been delayed will go ahead, and you will see investment flowing into the country. If we vote to leave, those delayed decisions will be canceled.”

There are already signs that companies are feeling the strain from the referendum. Markit Economics said May 5 its services Purchasing Managers Index had dropped to 52.3 from 53.7. While that’s above the 50 level that divides expansion from contraction, it’s the weakest since February 2013 and below the 53.5 median forecast of economists.

Osborne urged his audience to speak up if they supported EU membership. “I wouldn’t want people to think after the event that they sat it out,” he said. “Your customers and workforce want information.”

A vote to leave the EU could threaten an estimated 285,000 workers in the U.K.’s financial services industry, Osborne said. About 100,000 jobs are directly linked to exports to the EU, which has led to the creation of another 185,000 indirect jobs, he said.

“We aren’t just talking about people working in the City of London, but those employed in financial services in towns and cities from Bournemouth to Birmingham to Edinburgh,” he said.

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