UK businesses have been warning the government from time to time if the government leaves the European Union without the deal they will pull their operations and manufacturing out of the UK. Jaguar, Airbus, BMW, and several other large businesses have informed the UK government.
Yesterday, the International Monetary Fund (IMF) has warned the UK government that if the country is leaving the European Union without a deal it will impact the UK economy as a whole leading to slowing down the economy.
According to the IMF Britain’s economy is expected to grow further by 1.5 percent annually in 2018 and 2019 as compared to the forecast of 1.75 percent if the country would have stayed in the EU. However, failure to get hands on the deal would result in contraction said, IMF Managing Director Christine Lagarde in a statement.
“A more disruptive departure will have a much worse outcome”, she said that on presenting annual IMF report on Britain’s economy.
Britain is scheduled to leave the EU entirely in March 2019, but London and Brussels are still lurking around the deal to secure a transition period. British Prime Minister Theresa May will meet EU leaders this week hoping to strike a deal.
The people in favor of Brexit say the country must stay away from EU in order to make direct trade deals with fast-growing economies around the world. However, people opposing Brexit as well as IMF argue that these kinds of deals would not take the country out of the turmoil after Brexit.
Ruth Lea, an economist from Arbuthnot Banking Group has criticized IMF for joining the new round of “Project Fear” which was started earlier during the referendum issuing warnings for the consequences of leaving vote.
Lea blatantly grilled IMF and said, “Did they learn nothing from their loss of credibility after Project Fear Mark 1? In other words, stop making bold claims when you really don’t know what will happen,” Lea said on Twitter.
UK’s economy is the world’s fifth largest, the economy slowed down after the decision of Brexit in 2016 and it continued to recover back quickly after that. According to the latest figures reported by Reuters, the economy had its fastest growth recorded over the last year.
But IMF is blowing a different whistle, it says there are still some daunting issues that need to be addressed before Brexit.