(VOVworld) - The UK's exit from the European Union could cause "severe regional and global damage", the International Monetary Fund warned in its latest outlook. The IMF said a so-called "Brexit" would disrupt established trading relationships and cause "major challenges" for both the UK and the rest of Europe.
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| International Monetary Fund Managing Director Christine Lagarde (Photo: Xinhua/ VNA) |
The IMF said the referendum has already created uncertainty for investors and a vote to exit would only heighten this. If the June 23 referendum in the UK were to produce a vote in favor of leaving the EU, the IMF expects negotiations on post-exit arrangements will be protracted, which, it warns, "could weigh heavily on confidence and investment, while increasing financial market volatility".
The IMF also believes a UK exit from the EU would "disrupt and reduce mutual trade and financial flows" and restrict benefits from economic co-operation and integration, such as those resulting from economies of scale. But, the IMF said, Britain’s increasing domestic demand, spurred by lower oil prices and a growing real estate market, will reduce the upcoming referendum’s impact on Britain’s growth.