Brexit

Scare tactics lost Remain the vote, says former BoE governor

The former governor of the Bank of England Mervyn King has criticised the government's conduct of the referendum campaign
Gavin Cordon, Press Association

THE government's conduct of the referendum campaign has been heavily criticised by the former governor of the Bank of England.

Lord King of Lothbury said the Treasury had been left in a "difficult position" after issuing a series of "exaggerated" forecast about the impact of a vote for Brexit.

He denounced Chancellor George Osborne's warning of an emergency budget with tax rises and spending cuts as the "nadir" of the campaign which ultimately backfired on the Remain camp.

"I think that was perhaps the nadir of the exaggeration. The idea that it makes sense now – or even in a year – to set a budget because of what may happen five, 10, 15 years down the road makes no sense," he told BBC News.

"If it is the case that the Treasury forecasts are right and we are facing a recession, that would not be the time to have budget to cut taxes and raise spending. The opposite."

He said the Treasury was now faced with the prospect of having to withdraw forecasts which it issued during the campaign.

"The Treasury is in a difficult position now because it did make very clear forecasts which I think were exaggerated in terms of at least the certainty that they led people to believe could be attached to those forecasts. Now I think they are going to have to row back," he said.

Lord King, who has not declared which way he voted in the campaign, said the "scaremongering tactics" had not worked and had been deeply resented by voters.

"This was the most dispiriting campaign I can recall in my lifetime," he said.

"I was travelling round the UK a lot at that time and I was struck by how many people said to me they didn't like the scaremongering tactics, they didn't like to be told that if they were to vote to leave they would be idiots.

"If you say to someone 'You are an idiot if you don't agree with me' you are not likely to bring them in your direction."

Meanwhile, The UK has lost its top AAA credit rating from ratings agency S&P following the result of the EU referendum.

S&P said the the outcome could lead to "a deterioration of the UK's economic performance, including its large financial services sector".

Earlier on Monday the pound plunged to a 31-year low against the dollar, and UK markets continued downward.

S&P had been the only major agency to maintain a AAA rating for the UK.

The rating downgrade can negatively affect how much it costs governments to borrow money in the international financial markets.

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