Brexit impasse harming global trade, says Angela Merkel

UK Prime Minister Boris Johnson set to unveil Brexit proposals on Wednesday

Angela Merkel arrives to discuss the federal budget with her cabinet. Getty

Brexit uncertainty is damaging to the global economy, German leader Angela Merkel said as she refused to solely blame US President Donald Trump’s hard-line stance on China for worldwide trade tensions.

The UK is supposed to be leaving the European Union on October 31 but parliament has three times rejected a withdrawal agreement offered by previous Prime Minister Theresa May. She was also forced to seek an extension to the original Brexit deadline as the impasse in Westminster hardened.

Her successor, Boris Johnson, has failed to renegotiate a new divorce deal with Brussels leading to fears of a ‘hard’ Brexit.

An unregulated exit would bring tariff and regulatory barriers down around Britain's borders and disrupt trade.

"We have nothing to be smug about. We've been negotiating an orderly British exit for three years. And that brings us great uncertainty when you consider that that exit should happen on October 31. And people still don't know how supply chains will look,” Ms Merkel said.

"That's a significant source of uncertainty since Britain isn't a small European country but a large global player," she added.

Mr Johnson has threatened to take the UK out of the EU on October 31 with or without a withdrawal agreement. His critics fear this would send the country plunging into a recession.

He is expected to reveal his new proposals for a deal on Wednesday, but EU officials have so far offered little to suggest it could be accepted.