Britain will fall into recession if there is a No-Deal Brexit later this year, the UK’s official budget forecaster ‘is set to warn later today’
- Office for Budget Responsibility reports on how crashing out the EU will affect wages, employment and house prices
- The five-year forecast predicts the economy will decline in 2020 and the UK will enter into a recession
- It also suggests that GDP will likely be at least 3 per cent lower under a No-Deal Brexit than if the UK leaves the EU with a deal
A no-deal Brexit will send Britain into a recession and shrink the economy by three per cent, the UK’s official economic forecaster will say today.
In its first assessment of the economic impact of crashing out without a deal, the Office for Budget Responsibility report on how crashing out of the EU will affect wages, employment and house prices.
The five-year forecast predicts the economy will decline in 2020 and the UK will enter into a recession, The Times reported.
The two Conservative candidates vying to be the next Prime Minister, Boris Johnson (pictured in last night’s Hustings event) and Jeremy Hunt, said they are willing to leave the EU without a deal
It also suggests that GDP will likely be at least 3 per cent lower under a No-Deal Brexit than if the UK leaves the EU with a deal.
This comes as the two Conservative candidates vying to be the next Prime Minister, Boris Johnson and Jeremy Hunt, said they are willing to leave the EU without a deal.
These predictions are based off a ‘soft’ no deal scenario modelled by the international Monetary Fund, which assumed there will be no border disruption but an increase in tariffs by four per cent.
Despite the recession, the OBR report presents a more optimistic forecast than that of the Bank of England.
Last November, the Bank warned the economy could shrink by eight per cent by 2035 and that interest rates would have to rise by 5.5 per cent to offset the impact.
It comes as MPs will have the chance to vote on legislation that could potentially thwart efforts by the next prime minister to try to suspend Parliament to force through EU withdrawal without an agreement on October 31.
The clash is looming because the Lords strongly backed a bid to block Parliament being suspended in order to facilitate a no-deal exit by a margin of 103 votes on Wednesday.
Labour joined Liberal Democrats and leading independent crossbenchers in the upper house to try to scupper what opposition peers branded a “constitutional outrage” by amending Northern Ireland legislation.
The change to the Northern Ireland (Executive Formation) Bill will require progress reports on restoring devolved government in Northern Ireland to be debated regularly in Parliament, effectively preventing it being prorogued.
The return of the Bill to the Commons on Thursday could see further amendments by anti-no-deal MPs selected by the Speaker, John Bercow.
The move comes amid reports that some ministers could resign in order to back efforts to block no-deal if a free vote on the issue is not offered by Prime Minister Theresa May.
Front runner for the Tory leadership Boris Johnson again refused at the final campaign hustings on Wednesday to rule out proroguing – suspending – Parliament in order to meet his red line of getting the UK out of the EU by October 31.