The UK economy would suffer "substantial costs" if London left the European Union without reaching a Brexit deal with Brussels, however, any Brexit scenario would entail costs for the both sides, the Intentional Monetary Fund (IMF) said in a report on Monday.
MOSCOW (Pakistan Point News / Sputnik - 17th September, 2018) The UK economy would suffer "substantial costs" if London left the European Union without reaching a Brexit deal with Brussels, however, any Brexit scenario would entail costs for the both sides, the Intentional Monetary Fund (IMF) said in a report on Monday.
According to the IMF, an agreement reached at Brexit talks will allow "important additional time" for the United Kingdom and the bloc to prepare for the new relations, however, it is also necessary to solve such fundamental issues as the future economic relationship between Brussels and London and the status of the land border with Ireland.
"Resolving these issues is critical to avoid a 'no deal' Brexit on WTO terms that would entail substantial costs for the UK economy - and to a lesser extent the EU economies - particularly if it were to occur in a disorderly fashion. While all likely Brexit outcomes will entail costs for the UK economy by departing from the frictionless single market that now prevails, an agreement that minimizes the introduction of new tariff and nontariff barriers would best protect growth and incomes in the UK and EU," the report said.
In case of a smooth Brexit and a "broad trade pact covering goods and some services," the UK economy growth is expected to be about 1.5 percent in 2018 and 2019, compared to about 1.75 percent if London had stayed in the European Union.
"A more disruptive departure from the EU could lead to a significantly worse outcome, especially if it were to occur without an implementation period," the IMF added.
The United Kingdom and the European Union have to address three important issues by the end of October, which will enable the smooth Brexit process with respect for the two parties' interests, including to finalize a treaty on the UK departure from the European Union, resolve the issue of the Irish border and decide on the format of future relations.
The United Kingdom voted to leave the European Union in a referendum in June 2016 and is expected to do so by late March 2019.
