IMF: ‘Brexit without a Deal will significantly Reduce the British Economy.’ The British economy will shrink considerably if no agreement is reached on the Brexit, warns Christine Lagarde, director of the (IMF) Monday.
Lagarde made its statements after the IMF published a report on the state of affairs of the British economy.
According to estimates by the UN organisation, the British economy will grow by 1.5 percent in 2018 and 2019 if there is a broad agreement between the United Kingdom and the European Union.
With a so-called ‘no deal Brexit’ the growth will be lower. The chance of such a situation seems to rise every day.
The IMF warns, however, that the subjects that are on the agenda during the Brexit discussions are “frightening”,
because of the scale of these issues. The Brexit talks are currently in place.
There is yet no deal on significant issues such as the Irish border issue and the future relationship between the UK and the EU.
The IMF director states that no Brexit agreement will be as good for the economy as the current condition, with free movement of goods, people and capital.
British minister Hammond takes warning ‘very seriously’
“We have to take this warning very sincerely,” stated British finance minister Philip Hammond after the publication of the report.
“The IMF is clear: a no-deal scenario is very costly for both the UK and the EU.”
According to Hammond, the probability of a British exit from the EU without agreement is unlikely, but not impossible.
The two parties need to approach an agreement in October so that adequate time is left to implement the deal.
The British Brexit minister Dominic Raab said at the end of July that he is confident that the appointment will be there.
EU chief negotiator Michel Barnier expects a deal in early November.
Barnier said Monday afternoon that the negotiations are taking place in “good atmosphere”.