Daily Mail

Families could be £6k worse off without trade pact warns IMF

- By Alex Brummer City Editor

BRITAIN could face a calamitous loss of output if it fails to reach a free trade deal with the EU, the Internatio­nal Monetary Fund warned last night.

The Washington-based institutio­n said that if the UK reverted to World Trade Organisati­on rules – as advocated by some Brexiteers – growth could be cut by up to 7.8 per cent over the next decade. This would see Britain’s economy worse off to the tune of nearly £6,000 per household.

There would be a less severe impact if Britain were to sign up to a Canadastyl­e free trade deal. But this would rob the British economy of up to 4 per cent of output.

The IMF also warned that if there is no deal, the UK would be hit by ‘widespread disruption­s’.

Its grim prediction­s for Britain’s economic future are in line with previous negative comments including the forecast from managing director Christine Lagarde after the 2016 refer- endum that Brexit would be ‘pretty bad, to very bad’ for the UK.

But since then Britain’s jobless rate has fallen to just 4.1 per cent of the workforce and the economy has continued to expand.

The IMF’s latest forecasts of the amount of lost growth from a no-deal Brexit are lower than the Treasury’s own leaked forecasts. A no-deal Brexit would ‘have a large negative impact on growth, especially if it happens in a disorderly manner and without a transition deal’, the IMF said.

A sudden departure from the EU would lead to a sharp drop in property prices, a plunge in sterling, a hit to business and consumer confidence and ‘widespread disruption­s’ in production and services, it said.

The size of shock from such an outcome ‘would be more severe’ than a negotiated agreement to abide by WTO rules or an agreed Canada-style free trade area. But IMF officials declined to say whether the UK economy would be pushed into a prolonged recession.

‘Widespread disruption­s’

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