Britain need
not suffer a recession if it leaves the European Union, the International
Monetary Fund has said in its assessment of the risks around the referendum.
The Fund said that the UK economy would be
comparatively weaker if it left the EU but under its "limited"
scenario - in which Britain stayed in the European Economic Area, the group
that includes Norway - growth would slip from 2.2% to 1.4% next year.
The drop is significantly smaller than that
forecast by the Treasury. However, the Fund said that under an
"adverse" scenario, in which the UK left the EU and failed to seal a
Norway-style deal, having to fall back on World Trade Organisation rules, the
UK would suffer a recession in 2017, with the economy shrinking by 0.8%.
The Fund's conclusions about the economic impact of
Brexit have been highly anticipated for the past month, since its managing
director, Christine Lagarde said that they would range "from pretty bad to
very, very bad".
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