IMF warns of negative impact of Brexit on British economy

The International Monetary Fund joined on Friday the warnings about the negative impact of the British exit from the European Union on the country's economy.

IMF managing director Christine Lagarde presented on Friday in London a report on Britain's economic situation.

Lagarde warned Britain may suffer "a protracted period of heightened uncertainty, leading to financial market volatility and a hit to output".

The report shows the organisation of the referendum on whether Britain should stay in or leave the EU has "an impact on investment and hiring decisions".

"This could entail sharp drops in equity and house prices, increased borrowing costs for households and businesses, and even a sudden stop of investment inflows into key sectors such as commercial real estate and finance," Lagarde advised.

She warned that Brexit could have "negative and substantial" effects on international markets.

The reports said "London's status as a global financial centre could also be eroded, as Britain-based firms may lose their 'passporting' rights to provide financial services to the rest of the EU."

The IMF gave this warning after the Bank of England predicted on Thursday that the possibility of Brexit will slow the growth of the British economy.

--IANS

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