EU countries warned of economic damage if no-deal Brexit happens

More than a million jobs could be at risk in the EU the IMF has warned Credit: PA

  • Video report by ITV News political correspondent Paul Brand

A no-deal Brexit could hit European Union countries to the tune of 1.5% of annual economic output, putting at risk more than a million jobs, the International Monetary Fund has warned.

The organisation said there "would be no Brexit winners" in such a situation.

Earlier, the European Commission warned businesses and citizens in the remaining 27 EU states to prepare for "significant disruption" as it could not rule out a no-deal Brexit when Britain leaves in March 2019.

The UK government has still yet to agree a way forward on Brexit following the referendum more than two years ago.

Once a plan is finally agreed, Theresa May would then need to negotiate it with the EU.

The UK Government announced it will produce around 70 “technical notices” over the coming weeks, setting out necessary preparations in the UK for a possible EU exit without agreement.

A no-deal scenario would hit the EU's economic output with losses of around £192 billion, according to Reuters calculations based on the IMF’s estimate of the size of the EU economy excluding Britain this year.

More than a million jobs in the EU are at risk, the IMF added.

In its report, the European Commission warned that “preparation must therefore be stepped up immediately at all levels and taking into account all possible outcomes”.

After yet another Cabinet reshuffle, Dominic Raab is now the Brexit secretary. Credit: PA

The European Commission released its report as Dominic Raab made his first visit to Brussels as Brexit Secretary for talks with chief EU negotiator Michel Barnier.

ITV News political correspondent Paul Brand reports Raab had a "constructive" conversation with Barnier, and they have agreed to "intensify" negotiations over the summer.

The 16-page Commission document warned of the possibility of long queues at borders and ports, disruption to planes and new restrictions on data transfers.

The IMF warned no deal could see Ireland losing almost 4% of its economy, due to its close trade ties with Britain, with countries such as the Netherlands, Belgium, Luxembourg and Germany also suffering.

A softer Brexit which keeps Britain in the European Economic Area would soften the blows, but this has been rejected by the UK Government.