IMF demands Brexit transition extended as coronavirus panics world markets

Kristalina Georgieva said the UK and the EU should agree to push back the beyond December 31 to avoid making the e “tougher”. Her comments come after the IMF on Tuesday predicted the steepest downturn in the world economy since the Great Depression of the 1930s would happen this year. "It is tough as it is. Let's not make it any tougher," Ms Georgieva, the IMF’s managing director, 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 UK, of the EU, the whole world."

After the Brexit transition period has ended the UK and the 27-member bloc will be faced with barriers to exports and imports if they have not reached a trade deal.

Challenges to trading in this way will be exacerbated by the coronavirus pandemic.

In her interview with the BBC broadcast on Thursday, Ms Georgieva praised the emergency measures taken by the Treasury and the Bank of England which she said had been taken "early" and were well-coordinated.

"That very strong package of measures is helping the UK, but given the UK's sizeable role in the world economy, it's actually helping everyone," she said.

Boris Johnson’s government has increased spending and cut taxes in measures that the budget office estimates will cost £100 billion.

Company loans worth £330bn have also been guaranteed.

The BoE has cut interest rates to 0.1 percent and ramped up its bond-buying by a record £2bn.

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And when asked specifically if she would advise leaders to extend the transition period, she said: "My advice would be to seek ways in which this element of uncertainty is reduced in the interests of everybody, the UK, the EU, and the whole world".

The Prime Minister has repeatedly ruled out extending the transition period.

And Number 10 has said the government’s position on the matter remains unchanged despite the coronavirus outbreak.

On Wednesday the UK and the EU announced their next round of trade talks.

Both sides will hold week-long discussions over video conference on the weeks commencing April 20, May 11 and June 1.

Britain’s chief Brexit negotiator David Frost and his EU counterpart Michel Barnier will meet on Monday.

In a joint statement released on Wednesday after the pair had spoken to each other, they said they are striving to make “real, tangible progress” on trade in the upcoming talks.

The statement read: “The two sides took stock of the technical work that has taken place since the first negotiating round on the basis of the legal texts exchanged by both sides.

“While this work has been useful to identify all major areas of divergence and convergence, the two sides agreed on the need to organise further negotiating rounds in order to make real, tangible progress in the negotiations by June.”

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