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IMF says its pre-Brexit gloomy forecast is proving to be true

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By Tokunbo Salako  with Reuters
IMF chief Christine Lagarde mulls over Britain's economic performance
IMF chief Christine Lagarde mulls over Britain's economic performance   -   Copyright  REUTERS/Stefan Rousseau

The International Monetary Fund says its pre-Brexit warnings have been vindicated

In a speech to mark the IMF’s first full assessment of Britain’s economic performance since the vote, Christine Lagarde described UK growth as "a bit of a disappointment" compared to strength elsewhere in the world.

"The UK economy is losing out as a result of that decision and that is caused by a combination of what I indicated which is high inflation pressure on wages on available income and obviously delayed investment decisions by the corporate sector as well as households."

Before the EU referendum Lagarde had said Brexit would have "pretty bad to very, very bad" consequences for Britain.

Read the IMF\'s full assessment on Britain\'s economy

Britain's Finance Minister Philip Hammond, who shared the platform, said he shared the IMF's concerns about the UK's high levels of public debt, but was optimistic about the future.

"One of the biggest boosts we can provide to the economy, the economy of the UK and the economy of the EU 27, is making early progress on delivering certainty and clarity about our future relationship."

The IMF says Britain’s economy is set to grow by around 1.5 percent in 2018, in line with its previous forecast, after growth of 1.6 percent in 2017

Its report also welcomes recent progress in the Brexit talks with Brussels but adds the timeframe for negotiating a new trade deal is ambitious.