London is bracing for another round of turmoil as the pound plunges further.
The Bank of England will issue another warning about the currency this week as it struggles to keep the pound’s value at around $1.60 an ounce, the lowest level since the financial crisis.
The move is seen as another warning from the central bank that it must act quickly if it wants to save the British economy from further collapse.
The pound’s slide came as the IMF warned that the UK is on track to default on its debt and hit a $1tn hole in the economy if it fails to do more to contain the shock from Brexit.
Ahead of the Bank of Britain’s meeting on Thursday, the IMF’s chief economist, Christiana Figueres, said the currency risk has worsened in recent weeks.
She warned that if the UK leaves the EU in March 2019, the UK will face the prospect of a “severe and severe shock” from the vote to leave the bloc.
Figuere also said that the currency’s slide would “severely damage” the global economy, and added that it could cause “significant” losses to the UK’s trade and financial sector.
Britain’s Brexit secretary, David Davis, said that while the Bank’s warnings were “clear”, they were not the final word on how the country should react to Brexit.
But he said: “There are other options available to us, including more time to negotiate a better deal.”
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