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IMF chief Lagarde urges 'smooth transition' in EU-UK relations after Brexit

Published 24/06/2016

Christine Lagarde has urged the authorities in the UK and Brussels to work on a
Christine Lagarde has urged the authorities in the UK and Brussels to work on a "smooth transition" to a new relationship

International Monetary Fund boss Christine Lagarde has urged the authorities in the UK and Brussels to work on a "smooth transition" to a new relationship amid fears about the economic impact of Brexit.

Ms Lagarde backed decisions by the Bank of England and European Central Bank to take action to "curtail excess financial volatility" following the referendum result.

She said the IMF would continue to monitor the situation and "support our members as needed".

Before the referendum, the IMF forecast that w ithdrawal from the EU could force the UK into recession in 2017 and deliver a 5.6% hit to national income by the end of the decade.

Ms Lagarde had rated the consequences of leaving the EU between "pretty bad to very, very bad" for the UK.

She said: "We take note of the decision by the people of the United Kingdom.

"We urge the authorities in the UK and Europe to work collaboratively to ensure a smooth transition to a new economic relationship between the UK and the EU, including by clarifying the procedures and broad objectives that will guide the process.

"We strongly support commitments of the Bank of England and the ECB to supply liquidity to the banking system and curtail excess financial volatility. We will continue to monitor developments closely and stand ready to support our members as needed."

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