(qlmbusinessnews.com via bbc.co.uk – – Mon, 17th Sept, 2018) London, Uk – –
The International Monetary Fund has warned that a “no-deal” Brexit on World Trade Organization terms would entail substantial costs for the UK economy.
Such an outcome would affect “to a lesser extent” other EU economies.
It said challenges in getting a deal done were “daunting” and warned against further UK interest rate rises.
The IMF said it expected Britain's economy would grow by about 1.5% a year in 2018 and 2019 if a broad Brexit agreement was struck.
Christine Lagarde, the IMF's managing director, added: “Those projections assume a timely deal with the EU on a broad free trade agreement and a relatively orderly Brexit process after that.”
The IMF said that all likely Brexit scenarios would “entail costs for the UK economy”, but that a disorderly departure could lead to “a significantly worse outcome”.
Speaking at a news conference at the Treasury in London, Ms Lagarde said: “Any deal will not be as good as the smooth process under which goods, services, people and capital move around between the EU and the UK without impediments and obstacles.”
She said a “disorderly” or “crash” exit from the EU would have a series of consequences, including reduced growth, an increased deficit and depreciation of sterling, leading to a reduction in the size of the UK economy.
She pointed out that countries tended to trade mostly with their neighbours, adding: “I think geography talks very loudly.”
In July, the IMF said the UK economy would grow by 1.4% this year and 1.5% in 2019.
