UK GDP could be cut by 1.5-4.5% by 2019 following Brexit, IMF chief says

The UK's potential exit from the European Union could result in anywhere between 1.5% and 4.5% being sliced off the country's gross domestic product (GDP) by 2019, according to Christine Lagarde, managing director of the International Monetary Fund (IMF).

In an interview published by the Le Monde newspaper on Monday (4 July), Lagarde said: "We haven't got the slightest idea how long talks between the UK and the EU will take, or the outcome of the discussions.

"Depending on scenarios and outcomes, British GDP could drop by 1.5% to 4.5% by 2019."

Worries over the eventual outcome of Brexit has created uncertainty for the UK economy, she added.

In Largarde's opinion, the worst case scenario would be one where the UK's trading status with the EU is not resolved, and falls by default to that of any third-country trading partner under rules of the World Trade Organisation.

The UK is yet to trigger Article 50 of the EU constitution, following which terms pertaining to the country's exit from the common market would be negotiated over a two-year period.

Following his decision to step down as Prime Minister, David Cameron has left it to his successor as Conservative Party leader to initiate proceedings. An election is currently under way in the party with an eventual winner expected to be named by early September.