Kristalina Georgieva has also warned that the difference between a Brexit deal and no deal was “quite dramatic”.

The IMF has estimated that leaving without a deal would cost the U.K. between 3.5% and 5% of GDP, and knock 0.5% off EU GDP as well.

The Fund’s new managing director says:

“That’s quite significant.”

No wonder she ‘jumped’ with excitement when Johnson and Juncker announced they’d reached a deal earlier today.

Georgieva also told reporters in Washington that there would still be implications from leaving with a deal but they would be “significantly more modest” -- knocking around 2% off GDP.

She added:

“A lot of that impact has already been absorbed because anticipation of the U.K. leaving has been built over the past 3 years.”

Kristalina Georgieva, the new managing director of the IMF, is also pleased that the UK and EU have reached a new Brexit deal.

Speaking at the Fund’s annual meeting in Washington, she says:

“This is good news. This is welcome. Just like the pound which jumped, when I saw the news I jumped.

I would very much like to see an agreement being reached”

I wouldn’t dare predict how Brexit will play out. But City analysts have to calculate these things.

And Oliver Harvey, macro strategist at Deutsche Bank, has estimated that there’s a 55% chance that MPs will reject this new Brexit deal on Saturday.

But what happens next? Assuming it’s not ratified, Harvey sees four ways it could play out -- including Johnson winning a general election and then pushing his deal through parliament.

• Confirmatory referendum before election: 10%
• General election leads to Johnson’s deal: 25%
• General election leads to no deal Brexit: 10%
• General election leads to second referendum: 10%

But he cautions that there is “considerable uncertainty” about how a November election would play out.

Some opinion polls suggest a substantial Conservative lead while others show a smaller lead. In general, however, the Conservatives’ polling performance has improved since Mr Johnson became leader. Importantly, and as discussed above, only one scenario would reintroduce the risk of a no deal Brexit: that of the Conservatives forming a minority government with the support of the Brexit Party/DUP.

David Malpass, the World Bank president, says a Brexit deal will be good for poor countries because it will end the uncertainty that has led to slower growth.

“If there were clarity it would help the growth outlook quite a bit” Malpass said at a press conference in Washington.

Malpass explained that problems in advanced economies have rippled across the globe:

“Uncertainty affects development because part of the slowdown in the developing world is related to the slowdown in the developed world. Europe has slowed significantly. If there was more certainty that would be very helpful.”

Business leaders are expressing some relief that the UK and EU have reached a Brexit deal, despite uncertainty over what it is...and whether it will pass.

Jonathan Geldart, Director General of the Institute of Directors, says there is “guarded relief” at this breakthrough -- and called on MPs to avoid a no-deal Brexit:

“Business, particularly in Northern Ireland, will want to examine the detail more fully before coming to a firm view, but they will be pleased that UK and EU leaders have made steps toward common ground.

“As MPs study the draft deal, they must keep firmly in mind the damage a disorderly exit could cause businesses large and small. A further extension offers no guarantees of avoiding this outcome, but if a passable deal is in touching distance then politicians on all sides should be pragmatic about giving us the time to get there.

“If the immediate choice is between leaving the EU in an orderly versus a disorderly manner, politicians must be mindful of the longer-term consequences their actions may bring to bear.”

Mike Cherry of the Federation of Small Businesses says it’s extremely important to avoid a no-deal on 31 October -- jobs and businesses depend on it.

If the deal is passed – focus needs to turn quickly to the future relationship and ensuring that lessons are learnt from the experience of the last three years.

“Many small businesses are just about surviving - not only do they desperately need certainty but they also need the Government to get back to business and focus on meeting the many domestic challenges that have fallen behind Brexit.”

News of a Brexit deal has sent shares in some UK-focused companies sharply higher.

The FTSE 250, which is a good barometer of the UK economy, has jumped by 0.6% to a new one-year high.

Across the market, banks and house-builders are rallying hard, on hopes that a no-deal Brexit can be avoided.

On the blue-chip FTSE 100 index, Persimmon, Barclays, Next, RBS and Lloyds are all up over 2%, extending their recent gains.

Important Brexit news: Brussels and London say they’ve agreed the terms of a deal for the UK to leave the European Union.

EC chief Jean-Claude Juncker and UK prime minister Boris Johnson have both announced that an agreement has been reached -- putting the ball back into parliament’s court.

This breakthrough has given sterling a big lift: up another cent in the last few minutes.

This has sent the pound surging through the $1.29 mark against the US dollar for the first time since May.

However... we’ve still not seen the text of what’s been agreed, and it’s not clear that the DUP will accept it (given their concerns over customs controls and consent).

Andy Sparrow’s Politics Live blog has all the details on another dramatic day:

Worryingly, the Bank of England has found that more companies and individuals defaulted on their loans in the third quarter in 2019 -- and the situation is likely to get worse.

Its credit conditions survey found that:

• Net percentage balance for changes in default rates for total unsecured lending increased in Q3. This was driven by an increase in defaults for both credit card and other loans (see chart below). Lenders expected default rates for total unsecured lending to increase slightly in Q4.
  
  
• The net percentage balance for changes in default rates on loans to corporates increased for small, medium and large businesses in Q3. These balances for defaults were expected to increase for businesses of all sizes in Q4.

Newsflash: Banks are planning to offer FEWER loans to businesses in the next few months, despite NatWest’s offer of more lending this morning.

UK lenders’ expectations of the availability of business loans has fallen sharply, to the lowest level since the financial crisis.

That’s according to the Bank of England’s credit conditions survey, just released.

Its gauge of likely loan availability tumbled to -13.5% for the October-December quarter, the weakest since early 2008 (when the credit crunch was biting).

The BoE explains:

It found that:

The overall availability of credit to the corporate sector was reported to have remained unchanged in Q3, and this was the case for small, medium and large businesses (Chart 2). The overall availability of credit to the corporate sector was expected to decrease in Q4.

Why? It appears that the banks are reacting to caution among their own customers.

The BoE’s survey found that lenders expect demand for corporate lending to fall in the current quarter too, with medium-sized businesses particularly reluctant to borrow more.

That implies that companies are resisting new investment, or expansions, while they await clarity on Brexit.

Building supplies group Grafton has issued a profits warning, blaming weaker demand in the UK (among other issues).

The company, which sells bricks, timber, cement, roof tiles, paint and bathroom fittings, told shareholders it has suffered “a softening in activity” in recent weeks.

Grafton says:

Volumes in the UK merchanting business were affected by weak underlying demand fundamentals as households deferred discretionary spending on home improvement projects against the backdrop of increased economic uncertainty.

That implies that UK customers have been holding off moving house, or improving their homes, until they have clarity over Brexit.

Grafton shares have plunged 10% in early trading, the biggest faller on the FTSE 250 index.

Brexit uncertainty has sent the pound lurching around this morning.

Sterling tumbled back from last night’s five-month high, after the DUP party rejected the deal being drawn up between Boris Johnson and the European Union.

DUP support is crucial to Johnson’s hopes of persuading parliament to back his revised deal.

But, they’re unhappy about the proposed customs checks at the Irish Sea, the way VAT would be handled across the border after Brexit, and Northern Ireland’s ability to consent to the arrangements.

This wiped a cent of the pound in early London trading, but it’s creeping back towards $1.28 -- and still up around six cents in a week.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

With the Brexit deadline less than 15 days away, British businesses are adopting the brace position.

Some are stockpiling vital goods in case of long queues at the ports, while others are frantically brushing up on exports rules so they can keep shipping goods and offering services across the channel.

But however much preparation they put in, disruption may be inevitable — especially in a disorderly no-deal Brexit.

This morning, NatWest Bank has warned that thousands of its customers are particularly vulnerable to the fog of Brexit uncertainty enveloping the UK.

The bank, part of Royal Bank of Scotland, is boosting its support fund by another £2.2bn to protect UK firms from Brexit damage. That raises the pot of funding to £8.2bn.

It explains:

“Through its on-going Brexit Customer Outreach Programme, NatWest has identified several thousand customers who may be the most impacted by the Brexit uncertainties, and has committed to proactively contacting those customers to help with their needs.”

The bank is also pledging to “support customers through Brexit” — which hopefully means some understanding and leniency if a firm’s cashflow suddenly clogs up, or sales take a dive.

NatWest is also holding events around the country for nervous business leaders to discuss their concerns about Brexit (and other issues too, of course).

That £8.2bn is billed as a “Growth Funding” package -- speak to business leaders, and many will point out that Brexit is the biggest factor holding back growth and investment.

Paul Thwaite, NatWest’s managing director for Commercial Banking, says there’s “a lot to do” to get ready for Brexit:

“During a time of such uncertainty, it is imperative that we do all we can to support our customers. Our business customers are extremely busy, and there is a lot to do. This is why we wanted to go to them offering our support in a proactive way.

We are very much open for business and want to be the bank that supports the UK’s businesses through this uncertain time.”

The pound remains highly volatile, as traders try to assess the chances of a deal. It hit a five-month high of $1.2875 last night, but has fallen by over a cent since, as the government struggles to persuade the DUP party to support it.

With EU leaders gathering for a crucial summit in Brussels today, sterling will surely be highly volatile today...

The agenda

• 9.30am BST: Bank of England Bank credit conditions Surveys
• 9.30am BST: UK retail sales figures for September:
• 1.30pm BST: US weekly jobless figures
• 2.15pm BST: US industrial production for September: