IMF says EU exit risk creates uncertainty for otherwise healthy UK outlook

The International Monetary Fund commended the UK’s economic growth but warned that the referendum on the European Union would throw uncertainty into the mix, weighing on the outlook.

In a report on Britain’s economy, the IMF said: “Uncertainty associated with the outcome of the planned referendum on EU membership could weigh on the outlook.”

The caution came as it pointed out that UK growth was surpassing other major advanced economies, with job numbers at historic highs and borrowing scaled back.

Managing director Christine Lagarde said: "The UK authorities have managed to repair the damage of the crisis like very few other countries have managed to do.

"We are saluting a very strong performance from the British economy which is due clearly to the commitment to consistent policies that have managed to restore confidence in the British economy."

However, the IMF also said the rise in house prices could leave some households vulnerable to income and interest rate shocks, and highlighted a strikingly large current account deficit as well as high household debt levels.