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IMF: Brexit hit to UK could be 'pretty bad to very, very bad'

Britain leaving the EU could have a "negative and substantial effect" on the UK's economic growth, the International Monetary Fund has said.

"A vote for exit would precipitate a protracted period of heightened uncertainty, leading to financial market volatility and a hit to output," the IMF said in a report published on Friday.

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IMF issues stark warning of Brexit 'contagion' effect

The vote on the EU referendum will take place on June 23. Credit: PA

A vote for the UK to leave the European Union could lead to sharp drops in equity, increased house prices, and higher borrowing costs, the International Monetary Fund has warned.

It also said London's status as a global financial centre could be "eroded" and the contagion effects of a Brexit could spill over into regional and global markets.

UK inflation could rise well above target for some time, its report also cautioned.

A vote for exit would precipitate a protracted period of heightened uncertainty, leading to financial market volatility and a hit to output.

– Excerpt from the IMF report

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