September 17, 2018 / 9:03 AM / a month ago

UK faces "significantly worse" outlook if no Brexit deal-IMF

LONDON, Sept 17 (Reuters) - Britain’s economy would face a “significantly worse” outlook if the country leaves the European Union next year without a deal than if it reaches a Brexit agreement, the International Monetary Fund said on Monday.

The IMF said it expected Britain’s economy would grow by about 1.5 percent a year in 2018 and 2019 if a broad Brexit agreement was struck.

In July, the IMF said the economy would grow by 1.4 percent this year and 1.5 percent in 2019.

But a more disruptive Brexit would lead to a “signficantly worse outcome”, the IMF said in its latest report on Britain’s economy published on Monday.

Britain is due to leave the EU in March next year but London and Brussels have yet to strike a deal to secure a transition period. Prime Minister Theresa May is hoping to make progress towards a deal when she meets fellow EU leaders this week.

Britain’s economy — the world’s fifth-biggest — slowed after the 2016 referendum decision to leave the EU and it continues to be outpaced by most other rich nations.

However, stronger-than-expected data last week showed the economy had its fastest growth in nearly a year, helped by the World Cup and hot summer weather.

The IMF said there was a “daunting” range of issues still be dealt with for Brexit and all outcomes of Britain’s departure from the EU would entail costs for the economy. (Reporting by Andy Bruce; writing by William Schomberg; editing by David Milliken)

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