The International Monetary Fund (IMF) has warned that a ‘Hard’ or ‘No-Deal’ Brexit could have an adverse impact on economic growth all across the European Union (EU).
In a new report examining the potential consequences of a “cliff-edge” exit from the EU, the group claims that a ‘No-Deal Brexit’ would result in a 1.5 per cent fall in economic growth all across Europe between now and 2030.
In some countries, such as Ireland, growth could even suffer by as much as four per cent, it says.
The estimations are based on what might happen to economic growth over the next decade if the UK ended up falling back on World Trade Organisation (WTO) rules in its dealings with the EU.
In comparison, the IMF says that a ‘Soft Brexit’ scenario involving retention of access to the single market “would imply almost zero cost for the EU as a whole,” its report says.
Meanwhile, a “standard” free trade deal similar to that currently shared by the EU and Canada would result in pinching EU economic growth by 0.8 per cent, it estimates.
“The integration of the EU27 countries and the United Kingdom has strengthened over time, reflecting shared gains from the EU’s single market,” the IMF said.
“Conversely the departure of the UK from the EU will inevitably represent a loss for both sides,” it added.
The forecasts come shortly after the EU published a paper documenting what businesses should do in order to prepare for a ‘No-Deal’ British exit.
Meanwhile, Prime Minister Theresa May has unveiled plans to ‘warn’ businesses and members of the public about the potential impact of leaving the EU without an agreement.
This will be achieved via a series of weekly advice “bundles,” which officials have said will commence whenever the Government thinks “a No-Deal is likely.”