Boris Johnson's own economic adviser warns leaving the EU is likely to 'depress the economy'

The Greater London Authority report warns of larger long-term downside risks in the event of Brexit

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Indy Politics

Leaving the European Union would create an “economic shock” and be “clearly” more risky than staying in the bloc, Boris Johnson’s chief economist has said.

In an official Greater London Authority report, Gerry Lyons wrote that in the short term Brexit would likely depress economic activity, while in the long term there were higher risks to leaving than staying in.

The analysis appears to directly contradict claims made in Mr Johnson’s newspaper column yesterday accusing opponents of Brexit of scaremongering.

“I am ever more convinced that the real risk is to sit back and do nothing, to remain inertly and complacently in an unreformed EU that is hell-bent on a federal project over which we have no control,” the Mayor wrote in the Daily Telegraph newspaper.

The Mayor of London also described the Treasury’s inclusion of a prediction of an “economic shock” in an analysis as a “curious spectacle”.

But Mr Lyons, the GLA’s chief economist, appeared to contradict Mr Johnson in a new report, “London: The Global Powerhouse”, released on Tuesday morning.

“Leaving the EU would be an economic shock. Most, if not all, economic shocks depress economic activity,” the report states.

“Thus economic forecasts that focus on, say, a couple of years ahead would tend to show that leaving the EU is always worse than the alternative.”

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The report examines a number of scenarios

Assessing longer-term forecasts, the economist concluded that Britain faced higher risks leaving, but that there were also some risks to staying in.

“Clearly these forecasts show a higher downside risk outside the EU, highlighting the importance of the policy chosen,” he said.

“However, these forecasts also indicate there is uncertainty associated both in leaving the EU and staying in it.”

The Mayor of London announced last month that he would campaign to leave the European Union – deepening the divisions in the Conservative party over the issue of Europe.

He was ridiculed by the Prime Minister David Cameron, who appeared to suggest Mr Johnson had made the decision to further his political career within the Conservative party.

“I am not standing for re-election. I have no other agenda than what is best for our country,” he told the House of Commons.

“I am standing here today telling you what I think. My responsibility as prime minister is to speak plainly about what I believe is right for our country.”

Mr Cameron at the weekend described the idea of Brexit as a “leap in the dark” while George Osborne, the Chancellor, also said it would amount to an “economic shock”.

The pair’s warnings attracted the ire of Work and Pensions Secretary Iain Duncan Smith on Sunday – who said people who made such arguments had a “low opinion of the British people”.

Despite the new GLA report apparently contradicting Mr Johnson’s stated view on the effects of Brexit, the Mayor of London signed an introduction to it, arguing that it was “an excellent piece of work that will enrich the present debate and help enhance our understanding of London’s economy”.

Commenting on the report, James McGrory, Chief Campaign Spokesman of Britain Stronger In Europe, said: “With every day that goes by, wheels just keep falling off the Boris bus.

From his own Deputy Mayor saying leaving Europe would put Londoners at risk of terrorism, to his economic adviser showing exit could hammer London’s economy and jobs, the message is that Londoners are stronger, safer and better off in Europe. Boris appears to have put his own political ambitions ahead of what is best for London.

As Mayor of our capital city he should be making the full-throated case for Britain to remain in Europe, and not advocating a risky and costly leap into the dark.”