Published On: Sun, Feb 10th, 2019

No-deal Brexit: IMF and CBI issue fresh warnings – ‘no deal would be BRUTAL!’ | UK | News


International Monetary Fund (IMF) boss Christine Lagarde said any deal struck by Theresa May will be inferior to EU membership while a no-deal Brexit would be “brutal”. And Confederation of British Industry (CBI) director-general Carolyn Fairbairn said firms are now in the “emergency zone” due to the uncertainty surrounding Britain’s divorce terms. As it stands, the UK will leave the EU at 11pm GMT on March 29 regardless of whether or not a deal is agreed.

But in the latest in a series of gloomy IMF predictions for Britain’s post-Brexit future, Ms Lagarde warned any type of exit will see trade with Europe impacted.

Speaking at the World Government Summit in Dubai, she said: “I’m certain of one thing, it’s that it’s not going to be as good as if there had not been Brexit, that is for sure,” she said.

“Whether it ends well, whether there is a smooth exit given by customs unions as predicted by some, or whether it’s as a result of a brutal exit on March 29 without extension of notice, it’s not going to be as good as it is now.”

The IMF projections match those of the UK Government, which predicts that growth will be lower than it otherwise would have been under all forms of Brexit.

Meanwhile, CBI boss Ms Fairbairn warned firms are already planning “price increases and job reductions” in response to a no-deal Brexit.

Appearing on Sky News’ Sophy Ridge On Sunday, she said: “Firms are having to plan in the here and now for a no-deal Brexit with all of the pain that that will bring.

“We know that businesses are leaving the country, we know that businesses are making plans that will damage communities across the country and just this week we had a new chapter in the unfolding nightmare that the trade deals that the UK businesses enjoy through the European Union will not be ready in time for leaving.”

However the CBI predicted in December that an “orderly Brexit” would see “steady economic growth” over the next two years.

Warnings about the economic hit from Brexit from the CBI and IMF have been dismissed by Brexiteers in the past.

During the 2016 referendum campaign, Michael Gove said people “have had enough of experts… from organisations with acronyms saying that they know what is best and getting it consistently wrong”.

And some pro-Brexit economists have challenged previous forecasts by the CBI directly.

In December, Brexiteer economist Gerard Lyons challenged Ms Fairbairn when she warned a no-deal Brexit on World Trade Organisation (WTO) terms would cost the economy billions in tariffs and additional bureaucracy.

But Mr Lyons claimed WTO terms represented an “opportunity in the future” because it would allow Britain to cut its own tariffs.

However WTO rules mean that the UK could not cut unilaterally tariffs for trade with just one country.

If Britain cut tariffs to one country, it would need to offer that tariff-free trade to every other nation it did not have a free trade deal with.



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