International Monetary Fund warns EU referendum creates uncertainty for Britain's economy

LONDON – The International Monetary Fund has offered Britain a glowing report on its economy, but warned that the potential for the country’s exit from the European Union weighed on its outlook.

The conclusion revealed Friday in the IMF’s annual assessment of the U.K. economy also warned about the rise of housing prices because of the possibility of “leaving some households vulnerable to income and interest rate shocks.”

The IMF says Britain’s economy looks to be running to “near capacity,” with strong growth likely to continue over the next five years. Inflation, now at minus 0.1 per cent annually, should gradually return to its 2 per cent target.

But the report says the planned referendum on EU membership injects an element of uncertainty into the picture.