Take Brexit deal or crash out of EU

• No-deal Brexit 'would entail substantial costs': IMF
• EU 'to do everything possible to avoid hard Brexit': Austria

British Prime Minister Theresa May insisted her Brexit plan was the only alternative to leaving the EU without an agreement -- something the IMF said yesterday would inflict "substantial costs" on the UK economy.

Despite strong opposition in her Conservative party and criticism in Brussels, May has stuck by the so-called Chequers proposal to keep close trade ties with the European Union after Brexit on March 29 next year.

"The alternative to that will be not having a deal," she told the BBC in an interview out yesterday.

May will meet EU leaders in Salzburg on Wednesday and Thursday, as she seeks a breakthrough in talks on the Brexit divorce and the future UK-EU trading relationship.

The International Monetary Fund yesterday said Britain's economy would suffer "substantial costs" should it leave the EU without a deal.

Brussels and London have failed to resolve "fundamental" aspects of Brexit and this could leave London defaulting to World Trade Organization (WTO) tariffs, the IMF said in its annual outlook on the UK economy.

"Fundamental questions -- such as the future economic relationship between the two and the closely-related question of the status of the land border with Ireland -- remain unanswered," it noted in a statement.

"Resolving these questions is critical to avoid a 'no-deal' Brexit on WTO terms that would entail substantial costs for the UK economy -- and to a lesser extent the EU economies -- particularly if it were to occur in a disorderly fashion," the IMF added.

The gloomy assessment contrasts with that of May, who indicated last week that a no-deal hard Brexit would not be a disaster for Britain.

May remains confident of striking an acceptable deal with Brussels.

But even if she gets an accord in the coming weeks, it must be signed off in parliament, where she can only muster a slender majority.

Former foreign minister Boris Johnson, who quit in July in protest at the Chequers plan, launched a fresh attack on it in his weekly newspaper column yesterday.

Austria holds the EU's rotating presidency and Chancellor Sebastian Kurz said the EU should strain to strike a deal with London at the Salzburg summit.

"We have to do everything possible to avoid a hard Brexit and to make possible that there will be a strong cooperation between the UK and the European Union," Kurz said yesterday ahead of talks with French President Emmanuel Macron.