JD Wetherspoon chief Tim Martin warns Brexit doom-mongering could lead to slowdown

Tim Martin accused Christine Lagarde and Mark Carney of 'irresponsible doom-mongering'

Zlata Rodionova

Wednesday 13 July 2016 11:01 BST

Tim Martin has seen £18 million wiped off the value of his shares in the days following the Brexit vote (PA)

Tim Martin, the chairman of JD Wetherspoon, has accused the IMF, the Bank of England and other major financial organisations of “irresponsible doom-mongering”, warning such talk could lead to a potential economic slowdown.

Martin, an outspoken critic of David Cameron and the Remain campaign, went as far as distributing more than 500,000 beer mats calling for UK to vote out of the EU membership ahead of the vote.

On Tuesday, Martin used his company’s latest trading statement to dismiss warnings following the referendum.

He singled out Christine Lagarde, IMF managing director, who warned that the consequence of a Brexit vote could be “pretty bad to very, very bad”.

He also said Mark Carney, the Bank of England governor and the Chancellor George Osborne were either dishonest or had a poor understanding of economics.

“In my opinion, the above individuals and organisations are either dishonest, or they have a poor understanding of economics, since democracy and prosperity are closely linked and the EU is clearly undemocratic,” Martin said.

“By voting to restore democracy in the UK, I believe the UK's economic prospects will improve, although it is quite possible that the unprecedented and irresponsible doom-mongering, outlined above, may lead to some kind of slowdown,” he added.

(JD Wetherspoon)

Martin described Brexit as the new Magna Carta – one of the most celebrated documents in history which for the first time, established the principle that everybody, including the king, was subject to law.

“Brexit is a modern Magna Carta, reasserting democratic control in the UK. It is up to UK citizens now to participate in formulating policies based on free trade with Europe and the world, an enterprise economy and sensible immigration policies, with parliamentary control,” he said.

“Big Brother in Brussels is no longer in charge. The world is our oyster, provided we think clearly, debate strongly and prevent the paranoia and hyperbole of the referendum process from clouding our judgement,“ he added.

JD Wetherspoon’s chairman made the comments alongside a company’s trading update which saw like-for-like sale rise 4 per cent in the final quarter and increase 3.4 per cent over the year.

”In spite of the dire warnings above, Wetherspoon trade strengthened slightly in recent weeks and we consequently anticipate a modestly improved outcome for this financial year. Caution should be exercised in extrapolating current levels of sales growth for future years,“ Martin said.

6 ways Britain leaving the EU will affect you

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1/66 ways Britain leaving the EU will affect you

6 ways Britain leaving the EU will affect you

More expensive foreign holidays

The first practical effect of a vote to Leave is that the pound will be worth less abroad, meaning foreign holidays will cost us more

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6 ways Britain leaving the EU will affect you

No immediate change in immigration status

The Prime Minister will have to address other immediate concerns. He is likely to reassure nationals of other EU countries living in the UK that their status is unchanged. That is what the Leave campaign has said, so, even after the Brexit negotiations are complete, those who are already in the UK would be allowed to stay

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6 ways Britain leaving the EU will affect you

Higher inflation

A lower pound means that imports would become more expensive. This is likely to mean the return of inflation – a phenomenon with which many of us are unfamiliar because prices have been stable for so long, rising at no more than about 2 per cent a year. The effect may probably not be particularly noticeable in the first few months. At first price rises would be confined to imported goods – food and clothes being the most obvious – but inflation has a tendency to spread and to gain its own momentum

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6 ways Britain leaving the EU will affect you

Interest rates might rise

The trouble with inflation is that the Bank of England has a legal obligation to keep it as close to 2 per cent a year as possible. If a fall in the pound threatens to push prices up faster than this, the Bank will raise interest rates. This acts against inflation in three ways. First, it makes the pound more attractive, because deposits in pounds will earn higher interest. Second, it reduces demand by putting up the cost of borrowing, and especially by taking larger mortgage payments out of the economy. Third, it makes it more expensive for businesses to borrow to expand output

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6 ways Britain leaving the EU will affect you

Did somebody say recession?

Mr Carney, the Treasury and a range of international economists have warned about this. Many Leave voters appear not to have believed them, or to think that they are exaggerating small, long-term effects. But there is no doubt that the Leave vote is a negative shock to the economy. This is because it changes expectations about the economy’s future performance. Even though Britain is not actually be leaving the EU for at least two years, companies and investors will start to move money out of Britain, or to scale back plans for expansion, because they are less confident about what would happen after 2018

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6 ways Britain leaving the EU will affect you

And we wouldn’t even get our money back

All this will be happening while the Prime Minister, whoever he or she is, is negotiating the terms of our future access to the EU single market. In the meantime, our trade with the EU would be unaffected, except that companies elsewhere in the EU may be less interested in buying from us or selling to us, expecting tariff barriers to go up in two years’ time. Whoever the Chancellor is, he or she may feel the need to bring in a new Budget

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Martin said ahead of the vote that his company would not be affected if Britain voted to leave the EU. But he had £18 million wiped off the value of his shares in the days following the Brexit vote – a very poor return on the £224,000 he spent on campaigning to leave the EU.

He was not the only Leave donor to suffer financial losses after the vote. Hargreaves Lansdown owner, Peter Hargreaves, gave £3.2 to the Leave campaign then saw £300 million wiped off the value of his firm.

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