IMF warns Boris over No Deal Brexit

Business braced as Johnson heads for Downing Street

BORIS Johnson has been warned that a No Deal Brexit is one of the biggest risks facing the global economy.

In a broadside against the new Prime Minister’s ‘do or die’ pledge to leave the European Union at the end of October with or without a deal, the International Monetary Fund said a chaotic departure could cause havoc across the world.

Alongside a fresh US crackdown on trade, No Deal is one of the gravest threats to international economic performance, the IMF said.

The warning came as the Washingtonbased fund cut its forecast for world growth this year.

It said: ‘The principal risk factor to the global economy is that adverse developments – including further US-China tariffs, US auto tariffs, or a No Deal Brexit – sap confidence, weaken investment, dislocate global supply chains and severely slow global growth.’

With investors and businesses crying out for clarity over Johnson’s plans, CBI director general Carolyn Fairbairn pleaded with him to avoid No Deal.

She said: ‘Business needs three things in the first 100 days – a Brexit deal that unlocks confidence, clear signals the UK is open for business and a truly pro-enterprise vision for our country.’

Eurosceptics have long criticised the IMF for anti-Brexit rhetoric and it has been one of the loudest opponents of No Deal, saying in April that it could trigger a lengthy UK recession.

It could set the fund on a collision course with Johnson, who has said that he will leave without an agreement if that is necessary to get Brexit done by the current deadline of October 31.

The Prime Minister has previously criticised the IMF for acting as part of a Brussels-loving global elite which wishes to block Brexit. In a newspaper column two months before the 2016 Brexit vote, he wrote: ‘All the usual suspects are out there, trying to confuse the British public.

‘We have heard from the IMF (which got the Asian crisis completely wrong), as well as the banks and the CBI, all of whom were wrong about the euro.

‘Davos man – the kind of people whose club-class air tickets are paid by the taxpayer, all the lobbyists and corporate affairs directors of the big companies: they are all increasingly nervous that they have been rumbled.’

Yesterday the IMF said that even without No Deal the global economy remains sluggish.

It now expects global growth of just 3.2pc this year, down from a prediction of 3.3pc in April.

Britain is predicted to grow by 1.3pc this year – assuming that a deal is reached with the EU.

‘The forecast assumes an orderly Brexit followed by a gradual transition to the new regime,’ the Fund said last night. ‘However, as of mid-July, the ultimate form of Brexit remained highly uncertain.’

The IMF said that the worst risks have been averted since its last update three months ago, such as an escalation in US tariffs on Chinese goods. But the Fund, which acts as an emergency lender to countries facing financial collapse, expects growth to remain subdued and urged all sides in disputes around the world to negotiate rather than walk away.