FROM BAD TO WORST
IMF chief says no deal would be a disaster as hardliners round on PM
BRITAIN can only expect a bad outcome from Brexit – but no deal would be the worst, the head of the IMF has warned.
Christine Lagarde waded in after Theresa May claimed her Chequers plan is the only alternative to no deal.
May laid down her stark ultimatum as right-wing Tories massed ranks against her proposal that would keep the UK in a customs union with the EU.
International Monetary Fund managing director Lagarde yesterday launched a report which predicted disaster for the UK.
The world financial watchdog boss insisted: “All the likely Brexit scenarios will have costs for the UK economy.
“The larger impediments to trade in the new relationship, the costlier it will be.” But she added that no deal “would inevitably have a series of consequences in terms of reduced growth going forward, increased deficit most likely, depreciation of the currency.
“It would mean in reasonably short order a reduction in the size of the UK economy.”
Lagarde spoke at her annual briefing at the Treasury alongside Philip Hammond.
The Chancellor provoked fury from eurosceptic Tories by claiming no deal would put the entire economic recovery since the 2008 financial crash at risk.
He said: “Leaving without a deal would put at risk the substantial progress the British people have made over the last 10 years in repairing our economy.”
The Chequers deal would give the UK control over immigration but retain a “common rule book” with the EU over the trade of goods but not services. The UK would have freedom to strike trade deals outside the EU.
In an interview for BBC’s Panorama marking 200 days to go to Brexit, May stated: “I believe we will get a good deal. We will bring that back from the EU negotiations and put that to Parliament.
“I think the alternative to that would be not having a deal because, a) I don’t think the negotiations would have that deal, and b) we’re leaving on the 29 March.”
Tory MPs in the hard-Brexit European Research Group claimed May risked a “car crash” if the UK signs up to the “common
Reduced growth, increased deficit and a smaller economy
CHRISTINE LAGARDE ON EFFECTS ON UK OF NO DEAL
rulebook” for food and goods as a fresh bout of civil war ensued.
Steve Baker MP, who resigned as a junior Brexit minister over Chequers, quoted a Boris Johnson attack on May which was published on Sunday.
Baker said: “If the Brexit negotiations continue on this path they will end, I am afraid, in a spectacular “political car crash”.
He added: “He’s right. The future for the UK alongside the EU must be based on an advanced FTA ( free trade agreement) plus a range of agreements.”
Jacob Rees-Mogg, the ERG chairman, rubbished May’s claim that the only options available would be accepting Chequers or leaving without a deal and accepting World Trade Organisation rules. He said: “The Prime Minister’s argument on the radio this morning [was] that it was either her plan or WTO terms, in which case WTO terms would be much better.” “The only reason we have got the Chequers plan is because she didn’t put forward a better one. It’s not this simple either/or case.” Labour, the Liberal Democrats and SNP are lined up to reject May’s Chequers plan when the deal is put to a vote in the Commons after the Brussels talks end. But when May was asked would happen if Parliament rejected the deal she expects to secure with Brussels, she said: “Do you really think the European Union is going to give a better deal at that point?”