Britain's possible exit from the European Union "could do severe regional and global damage" by disrupting international trade relations and poses the biggest risk to the global recovery, the International Monetary Fund warned today.
"A British exit from the European Union could pose major challenges for both the United Kingdom and the rest of Europe," IMF chief economist Maurice Obstfeld said in its latest 'World Economic Outlook'.
"The planned June referendum on European Union membership has already created uncertainty for investors; a 'Brexit' could do severe regional and global damage by disrupting established trading relationships," the IMF said.
Slashing the global growth forecasts and for the UK as well as other advanced economies, the Washington-based financial institution said Britain voting to leave the EUposed one of the biggest risks to the global recovery.
The UK economy is now expected to grow by 1.9 per cent this year, according to the IMF.
This represents the weakest annual growth since 2012 and is down from a forecast of 2.2 per cent just three months ago.
The IMF's position on Brexit is also in sync with the official position of the British government who have advocated for Britain to remain within the 28-member block.
"While Britain remains one of the fastest growing advanced economies in the world, the IMF's warnings about our exit from the EU are stark. For the first time, we're seeing the direct impact on our economy of the risks of leaving the EU," UK Chancellor George Osborne said while commenting on the IMF's warning.
Meanwhile, British Prime Minister David Cameron tweeted: "The IMF is right - leaving the EU would pose major risks for the UK economy. We are stronger, safer and better off in the European Union."
Vote Leave, the group campaigning for the UK to leave the European Union, criticised the IMF's findings saying it had "been consistently wrong in past forecasts about the UK and other countries".
Britain Stronger In Europe, which is campaigning for the UK to remain within the EU, said businesses and families should heed the IMF's warning.
