The International Monetary Fund (IMF) has warned the UK that a ‘no deal’ Brexit could ‘damage the global economy’.
In a recently published report, the IMF downgraded its global growth forecast for 2019 to 3.5%, and its forecast for 2020 to 3.6%. Within the report, the IMF wrote: ‘A range of triggers beyond escalating trade tensions could spark a further deterioration in risk sentiment, with adverse growth implications, especially given the high levels of public and private debt.
‘These potential triggers include a no deal withdrawal of the UK from the EU, and a greater-than-envisaged slowdown in China.’
Commenting on the matter, Gita Gopinath, Chief Economist at the IMF, said: ‘As of mid-January, the shape that Brexit will take remains highly uncertain.
‘We have done our estimates of how costly it would be on the British economy to have a no deal Brexit, which would be a decline of long-run GDP of about five to eight percentage points. It is absolutely essential that [the Brexit] uncertainty is resolved sooner rather than later.’