Brexit will not be 'without pain' warns IMF chief Christine Lagarde
'Uncertainty is always a risk,' says the former French trade minister
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Separation from the European Union will not be "without pain", International Monetary Fund chief Christine Lagarde has warned.
Any Brexit trade deal the UK strikes with Brussels was unlikely to be as good as the current arrangements enjoyed as part of the single market, the former French trade minister said.
A series of issues remained to be resolved about the UK's future trading relationship with the EU and other countries and "uncertainty is always a risk", she added.
In its latest World Economic Outlook, the IMF said it now expects the UK economy to grow by 1.5 per cent this year, marking a 0.4 per cent upward revision to forecasts made in October.
But it downgraded its UK forecasts for 2018 by 0.3 per cent, with gross domestic product (GDP) growth for 2018 now expected to come in at 1.4 per cent.
The "extraordinary" response by the Bank of England and the "quite remarkable" behaviour by British consumers who have continued to spend had helped the economy defy the gloomy forecasts - including by the IMF.
But at the World Economic Forum in Davos Ms Lagarde told the BBC: "Once uncertainty clears, if people feel that their ability to set up shop in the UK and operate throughout the geographical area that is the European Union is not working as well as it did, the investment decision will change.
"In the same vein, if exports are subject to significant tariffs, restrictions and so on and so forth, the ability of the UK to activate that trade engine is going to be reduced.
"So while we have upgraded our forecasts for 2017, we have downgraded for 2018 ... We are still of the view that it will not be positive all along and without pain."
Ms Lagarde echoed the views of Maltese Prime Minister Joseph Muscat, who said that any Brexit deal the UK strikes with Brussels must be "inferior" to EU membership.
She said the members of a club "have a degree of affinity and particular terms under which they operate" and "somebody outside the club ... has different access".
The future relationship the UK agrees "would certainly be different, and if being part of a club is optimising and leveraging your membership it would not be as good".
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments