The International Monetary Fund (IMF), on Monday urged Britain and the European Union (EU) to reduce the risks in the wake of Britain’s referendum to leave the EU.
IMF Managing Director Christine Lagarde told a forum at the Aspen Ideas Festival in the U.S. state of Colorado.
“At this point policymakers both in the UK and in Europe are holding that level of uncertainty in their hands.
“How they come out in the next few days is really going to drive the direction in which risk will go,’’ Lagarde said.
Following a decision to exit the EU, Britain would need to negotiate the terms of its withdrawal and a new relationship with the EU.
Lagarde said that the IMF would continue to encourage the parties involved to actually proceed with this transition in the most efficient, predictable way in order to reduce the level of uncertainty.
He said that it would determine the level of future risks.
Lagarde added that the IMF would continue to monitor the development closely and stood ready to support its member countries as needed.
The IMF chief urged Britain and the EU authorities to work collaboratively to ensure a smooth transition to a new economic relationship between the UK and the EU.
The IMF had warned before the referendum that the British economy could shrink 0.8 per cent in 2017 if it leaves the EU.
According to a report released by the IMF earlier this month, spillover from the British exit will be felt mostly by EU countries that have close trade and investment links with the country.
IMF said the countries include Ireland, Cyprus, Malta, the Netherlands and Belgium. (Xinhua/NAN)