International

Extend Brexit transition, says IMF

Britain should ask for an extension to its post-Brexit transition period to ease uncertainty at a time when the world economy is being hammered by the COVID-19 pandemic, the head of the International Monetary Fund said.

“It is tough as it is. Let’s not make it any tougher,” Kristalina Georgieva told BBC radio.

“My advice would be to seek ways in which this element of uncertainty is reduced in the interests of everybody, of the U.K., of the EU, the whole world.”

The transition period is due to end on December 31, and barriers to exports and imports will go up if a new trade agreement is not reached by then, a challenge which has been made harder by the pandemic.

Ms. Georgieva was speaking after the IMF warned on Tuesday that the world economy is heading for its steepest downturn this year since the Great Depression of the 1930s.

She praised the emergency measures taken by Britain’s Finance Ministry and the Bank of England (BoE), which she said had been taken “early” and were well-coordinated.

“That very strong package of measures is helping the U.K., but given the U.K.’s sizeable role in the world economy, it’s actually helping everyone,” Ms. Georgieva said.

The government has increased spending and cut taxes in measures that Britain’s budget office estimates will cost £100 billion ($125 billion). It has also offered guarantees for £330 billion of company loans.

The BoE has cut interest rates to 0.1%.

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Printable version | Jul 5, 2020 5:55:00 PM | https://www.thehindu.com/news/international/extend-brexit-transition-says-imf/article31359906.ece

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