Brexit just forced the IMF to cut its growth forecast for Britain's economy

The International Monetary Fund slashed its forecast for UK economic growth, saying the vote to leave the European Union has “thrown a spanner in the works” of the global economy.

The IMF shaved off 0.9 percentage points from its previous economic forecast for the UK, estimating growth of 1.3% in 2017.

This year the UK will grow by 1.7%, the IMF said, down 0.2 points on its previous assessment made in April.

Maury Obstfeld, the IMF’s economic counsellor, said: “The first half of 2016 revealed some promising signs — for example, stronger than expected growth in the euro area and Japan, as well as a partial recovery in commodity prices that helped several emerging and developing economies.

“As of 22 June, we were therefore prepared to upgrade our 2016-17 global growth projections slightly. But Brexit has thrown a spanner in the works,” Obstfeld said. The organisation cut 0.1 percentage points from its 2016 and 2017 global growth forecasts of 3.1% and 3.4% respectively.

The IMF was a harsh critic of Brexit before the vote, warning a vote to exit the European Union could leave Britain’s economy more than 5% smaller by 2019 than with a vote to remain in April.

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