Daily Express: ‘ARROGANCE’ Rees-Mogg hits out at IMF chief Lagarde in Brexit row

THE HEAD of the International Monetary Fund faced a furious backlash last night after claiming Brexit will spark a mass relocation of City firms to the EU.

Christine Lagarde, a key figure in the “Project Fear” propaganda blitz in the run up the 2016 referendum on the UK’s EU membership, suggested the country’s departure from the bloc next March would mean an “influx” for the euro zone.

She urged Europe’s financial regulators to step up preparations for the movement of business from London to the continent and to Ireland after Britain’s break with Brussels.

But her remarks provoked criticism from Brexit supporters last night, who pointed out that a series of doom-laded forecasts from the IMF about the effects of the vote to leave the EU on the economy had been proved wrong.

And they appeared to fly in the face of signals from Deutsche Bank and other leading financial institutions that Brexit will not lead to an exodus from the City.

Ms Lagarde made her latest incendiary intervention into the Brexit debate at conference organised by the European Central Bank in Dublin.

The IMF managing director said: “The euro area needs truly integrated financial and capital markets that allow companies to raise financing across borders more easily and support investment.

“In the near-term, it is critical to ensure that regulatory and supervisory capacities are prepared for the influx of financial firms that will move to continental Europe – and Ireland – as a result of Brexit.”

Senior Tory MP Jacob Rees-Mogg said: “The competition for the City is from international finance centres such as New York, Singapore and Hong Kong. It is not from second tier EU cities.

“Mrs Lagarde shows the narrow arrogance of the European bureaucrat who thinks the world revolves around the EU’s out-dated protectionist model.”

Critics pointed out that the IMF chief had close links with former chancellor George Osborne, the architect of the Treasury’s “Project Fear” propaganda campaign that wrongly predicted economic meltdown for the UK in the event of a vote to quit the EU in the 2016 in-or-out referendum.

A spokesman for Economists for Free Trade, a Brexit-backing think tank, said: “The economic predictions of Christine Lagarde and the IMF have historically been embarrassingly off the mark.

“Throughout the EU referendum campaign Lagarde was at the heart of Project Fear.

“She warned that Brexit would lead to a recession, that shares would crash and house prices would fall. She was completely wrong and our economy has thrived.

“There is absolutely no evidence that any moves by financial firms to continental Europe will be of any significance – her predictions should be completely disregarded.

“In fact, the German Investment Funds Association has recently asked for ‘unhindered access’ to investment services provided by the City of London after the UK leaves the EU stating – the importance of such access will significantly increase in the event of Brexit’.”

Tory MEP David Campbell Bannerman, a leading Brexit supporter, said: “Christine Lagarde was helped into renewing her IMF role the second time around by George Osborne, architect of Project Fear.

“The IMF were disgraceful during the referendum and are up to their old tricks again.

“The EU is only a bit player in financial services – Frankfurt is only 23rd in world rankings, Lagarde’s Paris 28th.

“They simply don’t have the depth of expertise or range of services or history of financial services to rival London which is number one in the world and will remain so after Brexit.”

TheCityUK, an organisation representing UK-based financial and related professional services, last night pointed out that there was no evidence of the EU “attracting a critical mass of jobs from the UK”.

Miles Celic, chief executive of TheCityUK, said: “London is the leading global financial centre as well as being Europe’s financial hub.

“While other centres across Europe may be seeking to draw post-Brexit business, what we’re seeing is that most activity is likely to leave Europe altogether and go elsewhere, to the likes of New York or Singapore.

“Other operations may cease entirely as they are no longer profitable. We are not seeing the EU attracting a critical mass of jobs from the UK.

“The UK-based financial and related professional services industry has developed over many years into an interdependent, interconnected ecosystem comprising a large variety of firms providing world-class services, products and advice.

“It brings significant benefits to the companies and households they serve across Britain and the rest of the world. It is not quickly or easily replicable in other centres.”

Recent research has suggested that City banks are looking to invest in existing London offices rather than locate staff to rival European financial centres such as Frankfurt, Paris and Dublin.

A survey earlier this year by the news agency Reuters found that that US banks JPMorganMorgan StanleyCitigroupBank of America Merrill Lynch and Goldman Sachs had a total 1,544 advertisements for jobs in Britain open on their websites.

Total vacancies available in Dublin, Frankfurt and Paris – the three cities attempting to tempt business away from the city of London after Brexit – stood at less than 200 for the five banks.

And earlier this year John Cryan, the chief executive of Deutsche Bank, dismissed claims that his firm would relocate 4,000 jobs from London to Frankfurt.

To read the Daily Express’s report in full, click here.

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