Skip to content
Search

Latest Stories

"No Brexit deal will hurt global economy"

by LAUREN CODLING

BRITAIN needs to come to a decision over Brexit as it poses a threat to the UK and global economies, a leading economic expert has said, as the UK government remains in political deadlock since MPs rejected prime minster Theresa May’s withdrawal deal last Tuesday (15).


Gita Gopinath, the chief economist of the International Monetary Fund (IMF), made the comments on Monday (21), stating it was “essential” that a conclusion was reached.

“We have already seen the negative effect of this uncertainty on British investment,”

Gopinath told reporters in Davos, Switzerland, ahead of the opening of the World Economic Forum summit.

“It is imperative for leaders to resolve this uncertainty immediately.”

The Indian-American economist said the IMF had already calculated that if Britain crashed out of the EU without a deal the result would be “a decline in long run... GDP of five to eight per cent”.

After her initial deal was rejected last week, Theresa May unveiled a new “Plan B” on Monday.

However, fears are growing that Britain will crash out of the EU on March 29 unless MPs can force a delay or come up with an alternative plan that Brussels is also happy with before the deadline.

The prime minister has confirmed she will be organising further talks with Brussels to try to salvage the Brexit deal.

MPs are due to debate next Tuesday (29) on the government’s proposed Brexit plan.

Gopinath’s comments came after the IMF released an update to its global economic forecast, showing that a range of uncertainties, including Brexit but also US-China trade confrontations, were threatening to drag down global growth even further.

The World Economic Outlook cut the global GDP forecast for this year to 3.5 per cent from the 3.7 per cent projected in October.

And for 2020 the estimate was trimmed to 3.6 per cent.

While it cut forecasts for several national economies, it forecast 1.5 per cent 2019 growth for Britain, the same as in October.

Lord Swraj Paul, an industrialist and founder of the Caparo Group, agreed with Gopinath’s comment.

Describing it as a “sad situation…and very un-British,” the peer said he doubted anyone was proud of the Brexit outcome so far.

“The government is doing whatever it can to sort it out, but it is a strange situation,” Lord Paul told Eastern Eye on Tuesday (22).

“Parties are fighting among themselves, not even against the opposition. But I have no doubt that it will get sorted out.”

The industrialist, who believes a second referendum would be a “mistake”, added he did not think delaying the deadline would make a difference.

“It would be a waste of time,” he said. “We must act mature and get on with it.”

Lord Jitesh Gadhia also concurred with Gopinath’s comments about the impact of uncertainty.

Speaking from the World Economic Forum in Davos on Tuesday (22), he said the global economy is facing “several headwinds” – ranging from a slowdown of the Chinese economy to trade tariff disputes to quantitative tightening of monetary policy.

“The more we can take uncertainties like Brexit off the table, the better the prospects for business confidence and long-term investment,” the investment banker told Eastern Eye.

Josh Hardie is the deputy director-general of the Confederation of British Industry (CBI).

Responding to Gopinath’s comments, he described the projected impact on the UK economy as “devastating”.

“While business will do [everything] it can to reduce some of the worst aspects, a no-deal scenario is unmanageable,” Hardie said.

Subsequent to the “historic” defeat in parliament, Lord Karan Bilimoria, the founder and chairman of Cobra Beer, believes the negotiations should be put on hold and a so-called People’s Vote should be held.

According to the founding chairman of the UK-India Business Council, figures show that the

UK economy could be 3.9 per cent smaller after 15 years under the prime minister’s Brexit plan, compared with staying in the EU.

The British pound has also lost 12 per cent of its value since May 2016.

Lord Bilimoria also highlighted a CBI estimate which showed that a no-deal Brexit could shrink the UK economy by 9.3 per cent over the same period.

“[This is] a catastrophic scenario which would have a deep impact on our neighbours and trading partners,” Lord Bilimoria said.

Describing Gopinath’s comments as “spot on”, he added that the uncertainty over the UK’s future and the fear of a no deal Brexit have caused foreign direct investment in the UK to halt.

“The UK has already tumbled from being the fastest-growing economy in the Western hemisphere in February 2016 to having the lowest growth forecasts over the next five years ever, at two per cent,” he noted.

He added: “For partners like India where the UK is the largest foreign investor in the G20 – accounting for nearly five per cent of total foreign direct investment (FDI) – this is very bad news indeed. Virtually no country in the world wants the UK to leave the EU.”

Also sharing Gopinath’s sentiments is Dr Rami Ranger CBE. The Sun Mark founder, who had backed May’s Brexit deal, said it would be in the interest of the world’s economy that a deal be struck between the UK and EU.

In this ever-shrinking world, he said, no country can avoid impacting many other nation’s economically with its own economic conditions.

“The economies of more and more countries are becoming increasingly interlinked,” he explained.

“For example, many countries have invested in the UK with the view to accessing the European single market, and if these countries cannot trade freely with Europe, then this will impact many other countries in the global economy.”

(With agencies)

More For You

Andrew Tate Sued by Ex-Girlfriend Brianna Stern Over Sexual Assault Allegations

Tate’s attorney, Joseph McBride, has dismissed the lawsuit

Getty

Andrew Tate faces sexual assault lawsuit from ex-girlfriend Brianna Stern

Social media personality Andrew Tate is facing a new lawsuit from his ex-girlfriend, Brianna Stern, who has accused him of sexual assault, battery, and gender violence. The lawsuit, filed in Los Angeles, details allegations of abuse and an incident that allegedly took place at The Beverly Hills Hotel on 11 March 2025.

Allegations in the lawsuit

According to the legal complaint, Stern claims that Tate initially appeared as a "dream come true" but later became emotionally and physically abusive. The lawsuit describes a violent encounter at the hotel, where she alleges Tate physically assaulted and threatened her.

Keep ReadingShow less
Voices of Faith 2025: A journey through spirituality and wisdom

Soumik Datta (R) and Gurdain Singh Rayatt

Voices of Faith 2025: A journey through spirituality and wisdom

Mahesh Liloriya

The inaugural edition of Voices of Faith commenced on Friday at the iconic Barbican Centre, Silk Street, London, marking the beginning of an extraordinary three-day festival exploring theological philosophies, interfaith dialogues, and the deeper essence of spirituality through conversations, music, and healing vibes.

Organised by Teamwork Arts, the creators of the Jaipur Literature Festival (JLF) and JLF London, Voices of Faith is presented by the Kamini and Vindi Banga Family Trust, with the support of Tech Mahindra. Eastern Eye and Garavi Gujarat serve as the official media partners of this landmark event. This unique festival seeks to offer insights into navigating the complexities of modern life through the timeless wisdom enshrined in global religious traditions. It focuses on the universal ideals of compassion and interconnectedness that underpin the world’s faiths, fostering dialogue that transcends barriers and deepens mutual understanding.

Keep ReadingShow less
Court reopens Asian child sex offender's deportation case

Home Office successfully challenged a ruling that allowed him to remain in Britain (Photo for representation: iStock)

Court reopens Asian child sex offender's deportation case

A PAKISTANI man convicted of sexually assaulting a child under 13 will face a fresh deportation hearing after the Home Office successfully challenged a ruling that allowed him to remain in Britain, reported The Times.

The offender, who cannot be named for legal reasons, had initially won his case to stay in the UK after claiming he would face "inhuman or degrading treatment" if sent back to Pakistan due to his alcoholism.

Keep ReadingShow less
India launches Operation Brahma to aid quake-hit Myanmar

Rescue teams work to save residents trapped under the rubble of the destroyed Sky Villa Condominium development in Mandalay on March 29, 2025. (Photo by SAI AUNG MAIN/AFP via Getty Images)

India launches Operation Brahma to aid quake-hit Myanmar

INDIA has swiftly responded to the devastating earthquake in Myanmar by launching Operation Brahma, sending emergency relief and rescue teams to the disaster-stricken nation.

A C-130J military transport aircraft of the Indian Air Force landed in Yangon on Saturday (29), carrying 15 tonnes of relief supplies including hygiene kits, blankets and food parcels. The aid mission comes after a powerful 7.7-magnitude earthquake struck Myanmar on Friday (28), killing more than 1,000 people and injuring nearly 2,400 others.

Keep ReadingShow less
Britain’s happiness crisis: UK hits record low in global wellbeing rankings

Pakistan stands at 109th place out of 147 countries

Britain’s happiness crisis: UK hits record low in global wellbeing rankings

THE UK has experienced a significant blow to its national morale, plummeting to 23rd place in the World Happiness Report for 2025 – its lowest ranking ever – despite being the world’s sixth richest nation.

Released to mark the UN’s International Day of Happiness last Thursday (20), the report provided a nuanced exploration of national contentment that extends far beyond economic measurements.

Keep ReadingShow less