Brexit heightens risks for global economy, G20 warns

The UK's vote to leave the European Union has heightened risks for the world economy, finance chiefs warned at the end of the G20 summit in China.

The group of the world’s 20 largest economies said that the outcome of last month’s referendum “adds to the uncertainty” for the global economy and urged the UK to remain “a close partner of the EU”.

UK Chancellor Philip Hammond said that Brexit had come up "a great deal" at the G20.

"The reality is there will be a measure of uncertainty continuing right up to the conclusion of our negotiations with the EU," he told reporters.

Following the meeting in Chengdu, the G20 insisted it had the tools to cope with the potential economic and financial consequences from the referendum result.

Other factors listed by the G20 as complications to the world economy include geopolitical conflicts, terrorism and refugee flows.

Germany’s central bank president Jens Weidmann said there were no signs yet that economic development in Europe had been affected by the Brexit referendum. He added that the G20 members agreed that the global economy would improve in 2016 and 2017 despite the Brexit vote.

New figures on UK companies in the three months to the end of June have raised concerns about the health of the economy before the Brexit vote. 66 UK listed companies issued profit warnings in the second quarter, which was the most for that period since the financial crisis in 2008, according to accounting firm EY.

"It's been a dizzyingly unpredictable time since the UK voted to leave the European Union,” said Alan Hudson, EY's head of restructuring in the UK and Ireland, said: "What we saw in the second quarter - and are still seeing now - is the initial impact of this uncertainty."

The International Monetary Fund (IMF) last week downgraded its forecasts for UK economic growth, from 1.9% to 1.7% for 2016, and for the global economy, from 3.2% to 3.1%.

IMF managing director Christine Lagarde on Sunday that the G20 had taken place at a time of "political uncertainty from the Brexit vote and continued financial market volatility".