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IMF Warns of 'Severe Economic Damage' of Brexit

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Brexit could cause severe damage to the global economy, the International Monetary Fund has warned, Sky News reported.

The IMF used its closely-watched World Economic Outlook report to slash its forecast for UK economic growth and warned if Britain were to leave the European Union it "could do severe regional and global damage by disrupting established trading relationships".

It is the Fund's first formal warning about the economic problems threatened by the forthcoming referendum, although its managing director, Christine Lagarde, has warned a number of times that Britain's departure would cause instability.

The warning came as the latest ICM tracker poll indicated a four-point lead for the Leave camp - 52 percent to 48 percent.

ICM's Jennifer Bottomley said: "... thus far, these bleak warnings have yet to produce any real shift in public opinion. Most polls continue to suggest that it’s a very tight contest, with neither side able to gain a decisive lead.

"However, we have noted in previous posts that the Leave camp stands to benefit on polling day from higher turnout among its supporters, and this week’s ICM poll is a clear illustration of this."

The IMF report said the referendum "has already created uncertainty for investors".

Although the Fund has yet to put figures on the precise impact of Brexit, it said the post-exit negotiations would be "protracted, resulting in an extended period of heightened uncertainty that could weigh heavily on confidence and investment, all the while increasing financial market volatility".


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