Concerns have for long been rising that Britain may crash out of the European Union with a no-deal Brexit as the warring sides have failed to agree on the terms of their divorce.
The latest has come from the International Monetary Fund. The Washington-based Fund has added its voice to calls for UK Prime Minister Theresa May to strike a Brexit deal with the EU.
All Brexit options would involve costs, but a no-deal goodbye would be costlier, inflicting “substantial costs for the UK economy, and to a lesser extent the EU economies,” the Bretton Woods Institution said on Monday. 
Brexit uncertainty is likely to weigh on investment, according to the IMF. UK Chancellor Philip Hammond agreed a no-deal outcome is not impossible in a joint press conference with IMF managing director Christine Lagarde.
The IMF is forecasting a “moderate” growth of about 1.5% this year and next depending on a timely trade pact and a relatively smooth exit process thereafter. But a more disruptive departure could lead to “a significantly worse outcome.” 
Bank of England Governor Mark Carney just days ago outlined worst-case scenarios to a cabinet meeting, including house prices tumbling, a falling pound and higher trade tariffs.
An EU-UK divorce with no agreement in place on how to continue doing business would mean various rules, permits and accords falling into limbo. Bottlenecks could bring shortages of everything from imported food to manufacturing components. EU citizens living in the UK and Britons living on the continent could be stranded without permission to remain.
For sure, the Brexit imbroglio is undermining London’s coveted status as the global financial hub.
The “City,” home to over 250 foreign banks and the Lloyd’s of London insurance market, has been facing a crisis ever since the Brexit vote on June 23, 2016. Firms are debating whether to shift jobs to continental Europe to keep serving customers there after Britain leaves the EU. 
An Ernst & Young report in June 2017 predicted a loss of 232,000 financial jobs in Britain as result of Brexit. 
The UBS Group picked Frankfurt as its post-Brexit EU hub a few weeks ago and has made preparations for the worst-case scenario of Britain crashing out of the bloc without a deal.
A central theme of the Brexit discourse has been the “passporting rights,” that entitles companies authorised in one country of the European Economic Area – currently comprising the 28 EU states plus Iceland, Liechtenstein and Norway – to sell their products and services throughout the bloc, accessing a $19tn integrated economy with more than 500mn citizens.
The government last month warned UK financial services firms are set to lose the right to market their products in the EEA post-Brexit, unless EU authorities take action to prevent it.
A disorderly Brexit would cause the British economy to contract, weaken the currency and push up the budget deficit, according to Lagarde.
Britain faces a “daunting” task to be ready for Brexit, the IMF warned, and the fiscal costs will far outweigh the money saved as a result of no longer paying into the EU budget.
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