Global growth will be dampened by Brexit, says IMF

Near-term economic growth would be dampened due to Brexit negations uncertainty in the UK, Europe and the rest of the world, according to the International Monetary Fund (IMF) on Thursday.

Following the UK’s decision to leave the European Union (EU) on the 24 June, the pound plummeted to 31 year lows. IMF spokesperson Gerry Rice, cited by Reuters, said currencies were “large but not excessively disorderly” since the referendum.

"It's clearly created a significant uncertainty for the global economy that we think is likely to dampen growth in the near term. And we need to be ready, all of us policymakers, with decisive actions that can help mitigate that as much as possible."

Rice encouraged bankers to be prepared to act to reduce excess volatility or add liquidity.

The global growth forecast was cut for the fourth time in a year by the IMF to 3.2% for 3.4% in April. Last week it reduced US growth forecast and said that it will likely cut its forecast for Germany as well due to Brexit.

Rice also said that it was up to the UK to trigger Article 50, which would formally start UK’s two- year exit from the EU.

"A quick agreement that is prudent and acceptable to all would of course be optimal. But on the other hand, and I want to emphasise the other hand, that rushing to a bad outcome or a negative outcome would not be in anyone's interest."

Rice also said Brexit would be part of update of the IMF's World Economic Outlook forecasts due on 19 July.