All "likely" Brexit outcomes will entail a financial hit for the U.K. economy, the International Monetary Fund (IMF) warned on Monday. But, it said, a disorderly "no-deal" scenario — where Britain leaves the European Union without any kind of trading relationship in place — would be much worse. "While all likely Brexit outcomes will entail costs for the U.K. economy by departing from the frictionless single market that now prevails, an agreement that minimizes the introduction of new tariff and non-tariff barriers would best protect growth and incomes in the U.K. and EU," the IMF said in its latest report on the outlook and risks to the world economy, published Monday.

The City or 'Square Mile' business district in central London. Vladimir Zakharov | Moment | Getty Images

The warning comes as negotiations between the U.K. and EU remain strained and key issues in the divorce — such as the future of the border between Ireland and Northern Ireland and the degree of trading access that will exist post-Brexit — remain unresolved. Making matters worse, Brexit supporters within the British parliament have rebelled against Prime Minister Theresa May's "Chequers plan," which lays out the U.K.'s future relationship with the EU and that would result in a "softer" Brexit and closer regulatory alignment with Europe. The U.K. parliament has to ratify the final Brexit deal that is reached and, aside from rumblings of discontent among both so-called "Brexiteer" and "Remainer" MPs who could oppose the final deal. In addition, the other 27 member states of the EU have to agree to any final deal, adding further complexities and stumbling blocks to the process. Against a backdrop of disagreements and political instability, the probability of a "no deal" scenario has looked more likely in recent weeks. For her part, May told the BBC in an interview due to air Monday that the only alternative to her Chequers deal is no deal.

'Substantial costs'