IMF chief Christine Lagarde stating the obvious
- IMF projections assume a timely deal, smooth Brexit
- But a more disruptive departure will have a much worse outcome
- Should not understate progress made in Brexit talks
- But there are many critical issues still left unresolved
- Range of issues at hand and lack of time for a Brexit deal is daunting
- Sterling's depreciation since Brexit vote has hurt real income growth
- UK exports have not picked up enough to stop overall slower growth
- UK has structural challenges beyond Brexit
- Disorderly Brexit would lead to sterling depreciation and increased deficit
- No deal Brexit outcome would lead to reduction in size of UK economy
- Any Brexit deal will not be as good as the current smooth processes in place
- UK would need to negotiate 63 trade deals in case of a no deal Brexit
Lagarde mainly highlighting the risks that she and the IMF are viewing on the UK economy on the Brexit scenarios they think will take place. There's a lot of emphasis on a no deal outcome, much like all other Brexit forecasts, but that's very much a "prepare for the worst" kind of mentality more than reflecting the current odds (which I still see somewhere near to 50-50).
