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A disruptive no-deal Brexit could wipe £70 billion off the UK economy by 2021, the International Monetary Fund warned today.

The body’s stark forecasts came on the eve of an emergency European Union summit at which Prime Minister Theresa May will plead to extend the Article 50 leaving process until June 30.

Backbench MPs have rushed through a law to force her to seek an extension rather than plough on with no-deal, with the UK still technically due to leave in just three days’ time.

The IMF’s latest World Economic Outlook warns that in a worst-case scenario of “significant” border disruption, higher tariffs and tougher regulations, as much as 3.5 per cent of output — around £70 billion — would be lost over the next three years compared to the economy’s current path.

However, its forecasts take no account of the potential effect of international cash flooding out of the UK and a potential hit to the pound in a cliff-edge Brexit.

Its gloomy scenario comes after Bank of England Governor Mark Carney warned last week that the risk of the UK falling into an accidental no-deal was “alarmingly high”.

Although some temporary arrangements are in place in sectors like aviation to keep planes flying, Mr Carney said it was “absolute nonsense” to claim such a scenario could be easily managed.

The IMF also warned today that a possible no-deal Brexit could unsettle a “precarious” global economy where risks are “tilted to the downside”.

The body reduced its UK growth estimates this year from 1.5 per cent in January to 1.2 per cent, and trimmed 2020 forecasts from 1.6 per cent to 1.4 per cent.

The organisation is also gloomier on world growth prospects overall as Donald Trump fights a trade war against China, while major European economies like Germany struggle to fight off recession.

That prompted the IMF to cut its global forecasts from 3.5 per cent to 3.3 per cent and warn that “a further escalation of trade tensions and the associated increases in policy uncertainty could further weaken growth”.

The verdict came as President Trump launched a fresh round of tariffs against the European Union in retaliation for its subsidies to European aircraft giant Airbus.

The IMF fired a thinly veiled shot at the US President today, saying the “main priority is for countries to resolve trade agreements co-operatively without raising distortionary barriers”.

It also called on central bankers around the world to cut interest rates to spur growth if “the current slowdown turns out to be more severe and protracted than expected”.