Britain will slide into a year-long recession should it leave the European Union without a deal with Brussels, the government’s official forecaster said Thursday.
“The UK enters a year-long recession in the fourth quarter of 2019” should Britain depart the bloc on October 31 with a “no-deal, no-transition Brexit”, the Office for Budget Responsibility (OBR) predicted in a key report.
State borrowing was meanwhile forecast to balloon by about £30 billion per year from 2020 on sliding tax receipts, should Britain default to the World Trade Organization (WTO) tariff system.
The OBR also warned that financial markets, and the British pound, could “fall sharply in a disorderly Brexit, reflecting the likely deterioration in financial market participants’ views about the future economic outlook”.
The OBR’s stress test report forecast a five-percent drop in the London stock market and a 10-percent slump in sterling — but market moves “could be more significant”, it highlighted.
