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Brexit impact on economy follows IMF's modest scenario - IMF's Thomsen
October 7, 2016 / 4:49 PM / a year ago

Brexit impact on economy follows IMF's modest scenario - IMF's Thomsen

WASHINGTON (Reuters) - The impact of Britain’s decision to leave the European Union on the country’s economy is so far following a modest scenario envisaged by the International Monetary Fund, the IMF’s head of the European Department Poul Thomsen said on Friday.

People hold banners during a 'March for Europe' demonstration against Britain's decision to leave the European Union, in central London, Britain July 2, 2016. Britain voted to leave the European Union in the EU Brexit referendum. REUTERS/Tom Jacobs

“While sterling obviously has declined sharply, there have been no major negative market reactions, in part because of a very strong and appropriate policy reaction by central banks, by the Bank of England and the announcement by the ministry of finance to stand ready with an appropriate fiscal policy stance if needed,” Thomsen told a news briefing.

“As for GDP we had two scenarios before Brexit -- a modest impact and a strong impact. We are largely in the modest impact scenario, we have revised slightly upwards our UK growth forecasts,” he said.

“The main issues are, in the longer term, how is this is going to be handled. It is absolutely critical that the uncertainty in this regard is settled sooner rather than later,” he said.

Reporting By Jan Strupczewski

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