Head of the International Monetary Fund said that Brexit’s six-month extension avoids a “terrible” no-deal outcome, according to Reuters.
The GPB/USD is trading steadily in the mid 1.30000s as the markets process the six-month Brexit extension.
“At least the UK is not leaving on April 12 without a deal. It gives time for continued discussions between the various parties involved in the UK. It probably gives time for economic agents to between prepare for all options, particularly industrialists and workers, in order to try to secure their future,” said the International Monetary Fund’s Managing Director Christine Lagarde.
Just yesterday Theresa May was given a six-month extension to October 31 for Britain to leave the bloc. But is this a trick, or a treat? Though an extension has been offered, voters remain more uncertain than ever on the future of the nation.
Speaking in Washington at the International Monetary Fund and World Bank, Bank of England Governor Mark Carney said “we will see how that time is used”. The six-month extension reduces the risk of a rash no-deal departure from the European Union.
“Right up until yesterday it could be argued that the UK has run out of time to forge that consensus. There are cross-party talks to try to find that, and that may take some time,” Mark Carney commented.
One of the most controversial aspects of the UK’s Brexit delay, however, is that the nation will have to hold European Parliament elections. Theresa May originally wanted an extension until the end of June and said that the government would aim to agree on a deal before May 23 in order to avoid participation in European Parliament elections.
As businesses across the UK warn of the Brexit related risks, the extension provides the British government with time to avoid a frantic no-deal departure.
It was previously reported that a no-deal could cost the UK luxury sector £6.8 billion in exports a year, and S&P Global Ratings predicted that had voters not chosen to leave in the first place, the UK economy might have been about 3% larger by the end of last year.
For now, UK citizens and business owners must wait and see if the six-month extension is an adequate period to leave the bloc with a deal.