IMF: Brexit to cause UK growth to slow

18 Apr 18

Growth in the UK is expected slow as a result of Brexit, according to the International Monetary Fund.

In the IMF’s World Economic Outlook report Cyclical Upswing, Structural Change, released yesterday, the organisation projected that the UK’s economic growth will continue to decrease until 2019.

This is in contrast to the global picture, where growth is expected to increase to 3.9% this year and next.

“In the United Kingdom, growth is projected to slow from 1.8% in 2017 to 1.6% in 2018 and 1.5% in 2019, with business investment expected to remain weak in light of heightened uncertainty about post-Brexit arrangements,” the report said. 

The IMF noted that these projections are relatively unchanged when compared to the October World Economic Outlook.  

“The UK is assumed to exit the customs union and the single market, but tariffs on goods trade with the European Union remain at zero, and non-tariff costs increase only moderately,” the report said.

Inflation in the UK is out of line with the global trends, the IMF also concluded. Most advanced economies have seen inflation remain below target whereas the UK is above its target.

The report said: “At 2.4% in February, UK core inflation is below the peak it reached in 2017 in the aftermath of the June 2016 Brexit referendum pound depreciation, but remains above the Bank of England’s target of 2%.”

A Treasury spokesperson said: “Our economy is at a turning point with our national debt starting to fall and the lowest unemployment rate for 40 years.

“We are building an economy that works for everyone by taking a balanced approach to supporting our public services, investing to improve our productivity and helping families keep more of what they earn.”

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