The International Monetary Fund in its projections predicted that the British economy is set to outpace the eurozone in the first two years after Brexit. The IMF predicted that the euro area would see economic growth of 1.3 per cent in 2020 and 1.4 per cent in 2021. But it suggested the UK economy could see economic growth of 1.4 per cent this year and 1.5 per cent next year.
However, the IMF's prediction of stable economic growth for the UK is predicated on an orderly divorce from the European Union. Britain is due to leave the bloc on January 31 when it will then enter into a standstill transition period which will come to an end in December. During that period the two sides will try to hammer out the terms of their future relationship.
Boris Johnson has ruled out any extension to the transition period and believes a complete trade deal can be agreed by the end of the year. But EU chiefs do not believe there is enough time to agree everything by December, raising the prospect of the UK and Brussels going their separate ways with only a partial agreement in place. That could jeopardise the growth projected by the IMF.
It said in its latest report that there must be a 'gradual transition' to new trading terms in order to ensure a positive outlook. 'In the United Kingdom, growth is expected to stabilise at 1.4 per cent in 2020 and firm up to 1.5 per cent in 2021 - unchanged from the October WEO,' the IMF said.
'The growth forecast assumes an orderly exit from the European Union at the end of January followed by a gradual transition to a new economic relationship.' The IMF's new world economic outlook report suggests that global growth will rise from an estimated 2.9 per cent in 2019 to 3.3 per cent in 2020 and 3.4 per cent in 2021.
