Brexit will 'not be positive all along and without pain', IMF's Christine Lagarde warns

This warning by Christine Lagarde comes just days after IMF upgraded the UK’s growth forecast for 2017Ruben Sprich/Reuters

Managing Director of the International Monetary Fund (IMF), Christine Lagarde, has warned that the UK's separation from the European Union is going to be complicated. She also said that it would not be all positive and would come with some pains.

The IMF chief's warning comes after Prime Minister Theresa May on Tuesday (17 January) presented a 12-point plan for Britain and said that the country would leave the single market.

Lagarde welcomed May's speech as it provided clarity. "Better clarity, less uncertainty is certainly better for the UK economy and for the rest of the European Union," she said.

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However, she warned that there were still many questions that needed answers. "The terms under which the [agreement] will be facilitated, over what period of time - question mark.

"Over what kind of transition period - question mark. It is only when those questions are better clarified that we will understand how the UK economy is going to pan out.

"We are still of the view that it will not be positive all along and without pain."

Interestingly, Lagarde's comments come just days after IMF upgraded the UK's growth forecast for 2017 as it admitted that it had been too pessimistic about the UK's growth after the June Brexit vote.

Speaking on the same, Lagarde told the BBC at the World Economic Forum in Davos that the UK had performed better than expected amid Bank of England's decision to cut interest rates. She, however, said that despite this upgrade there were still some downside risks ahead.

"Once uncertainty clears and if people feel that their ability to set up shop in the UK and their ability to operate throughout the geographical area that is the European Union is not working as well as it did - the investment decision will change.

"In the same vein, if exports are subject to significant tariffs, restrictions and so on, the ability of the UK to activate that trade engine is going to be reduced. So while we have upgraded our forecast for 2017, we have downgraded for 2018," she said.

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Lagarde added that any deal that the UK would sign with the EU would not be as good as being a member. "When you belong to a club, whatever that is, the members of the club have a degree of affinity and particular terms under which they operate. Someone outside the club has different access," she explained.

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