The Managing Director of the International Monetary Fund (IMF), Christine Lagarde, on Thursday warned that a further extension to Article 50 will hinder growth in the UK economy,
Lagarde projected that businesses and investors would remain hesitant in the coming months, warning that if there is prolonged uncertainty, it would have a “negative impact”.
Speaking at the ongoing World Bank and IMF Spring Meetings in Washington, the former French finance minister, however, expressed the hope that a deal could be struck quickly to avert the potential negative implications of the lingering delay on Brexit for the nation’s socio-economic development.
Lagarde said: “If there was a prolonged uncertainty, we can suspect that the impact on confidence would continue because… whether you’re talking about investors, whether you’re talking about decisions as to where to expand, where to set up, how to organise a supply chain, people are going to wonder… what comes next and how will it settle?
“So it would have a negative impact, no question about it”, she added.
While sympathising with British businesses on the Brexit-triggered plight, Lagarde pointed out that even with the contingency plans in place, the businesses would face disruptions, including likely hit to their balance sheets and possibly market share, in the event of a no-deal Brexit.
It would be recalled that the IMF early this week had warned that no deal would cause the UK economy to shrink, a position that had been maintained by the Government and the Bank of England.
Reflecting on the Brexit issue based on her personal experience, the IMF managing director said the Brexit process was very concerning on the one hand and very sad on the other.
She explained: “I grew up across the Channel and in the city of Le Havre, and to me being able to go across to Southampton, in an easy and unhampered way, was wonderful.
“Having my positive hat on it removes the risk of the no-deal Brexit on April 12, so at least the UK is not leaving on April 12 without a deal. We believe that the no deal Brexit would have been a terrible outcome”, Lagarde added.
