UK economy will face “dire consequences” if the country leaves the EU next year without a Brexit deal, and any deal will leave the country financially worse off than staying in, the International Monetary Fund (IMF)’s latest annual assessment of the UK economy has shown.
Expressing concern at the possibility of an acrimonious divorce next March, the IMF’s managing director Christine Lagarde added: “If that happened there would be dire consequences. It would inevitably have consequences in terms of reduced growth, an increase in the [budget] deficit and a depreciation of the currency. In relatively short order it would mean a reduction in the size of the economy.”
The IMF expects Britain’s economy to grow by about 1.5 per cent a year in 2018 and 2019 if a broad Brexit agreement is struck, compared with about 1.75 per cent if it had stayed in.
“As the IMF has said, no deal would be extremely costly for the UK as it would be for the EU,” chancellor Philip Hammond said, adding: “Despite contingency planning, it would put at risk the significant progress made over the past 10 years in repairing the economy.”