Christine Lagarde, the head of the International Monetary Fund, has warned that both the UK and the European Union would suffer in the event of a vote in favour of a Brexit in the June referendum.
“My hunch is that (a Brexit) is bound to be a negative on all fronts,” Ms Lagarde said. “For those that stay, because there are fewer of them, and for those who go, because they lose the benefit of facilitation of exchange.
“Uncertainty is bad in and of itself. No economic player likes uncertainty. They don’t invest, they don’t hire, they don’t make decisions in times of uncertainty.”
Her comments followed publication of a report on the outlook for the UK economy in which the IMF branded the referendum on EU membership as a “risk and uncertainty”. It said the UK’s recent economic performance was “strong” and driven in part by healthy growth, record employment and the strength of the financial sector.
But it warned there were still looming threats on the horizon, including the increasingly gloomy global economy, sluggish productivity growth, high-levels of UK household debt and the referendum on Europe.
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