Brexit will hurt world economy: US Treasury chief Jacob Lew

US Secretary of the Treasury Jacob Lew testifies during a hearing on March 8, 2016 in Washington, DC.
US Secretary of the Treasury Jacob Lew testifies during a hearing on March 8, 2016 in Washington, DC.PHOTO: AFP

WASHINGTON (AFP) - A British exit from the European Union will have a negative impact on the UK, European and world economies, US Treasury Secretary Jacob Lew warned on Tuesday (March 29).

Britons are set to vote in a crucial referendum on June 23 to decide whether to back a so-called Brexit - or exit from the European Union.

The consequences of a Brexit - in terms of the flow of trade and economic relationships - would have far-reaching repercussions, Mr Lew told Charlie Rose on public television PBS.

"I don't think it's good for the European, or the British economy, or the global economy," Mr Lew said, adding: "And in a world where one of the things that drives the economy is the uncertainty of geopolitical risks.

"It is clear that when you increase the level of unease, it has an economic consequence."

Asked about the international effort to cut off the finances of the Islamic State group through sanctions, Mr Lew acknowledged that it is "a complicated story" because the group is "a complicated creature".

"The terrible truth about the horrible events in Brussels and Paris is, it doesn't take that much money to do things like that," he said.

"We work with our counterparts in Belgium, in France, around Europe, to make sure we share information" to see where money is moving before or after attacks, he said, adding that the United States has the "most sophisticated capabilities in the world" in surveillance.

"The rest of the world needs to pick up its game and develop that kind of sophisticated set of tools," he said.

"We can't watch everything in the world."