The Office for Budget Responsibility has issued a stark warning about the UK economy, indicating a high likelihood of entering a severe recession, especially if a no-deal Brexit occurs, which could potentially double the budget deficit next year.
The possibility of a no-deal Brexit has sparked a range of concerns and fears. Consumer confidence has taken a hit during the Brexit proceedings, along with the depreciation of the British Pound (GBP). Various sectors, such as exports, real estate, and financial services, are anticipated to suffer significantly in the event of a no-deal Brexit. Notably, new stringent customs procedures at borders could lead to delays in the movement of goods, impacting the export sector. The OBR predicts that a no-deal Brexit would result in substantial trade barriers, a 2% decline in the UK economy, and a devaluation of the Pound.
British Chancellor of the Exchequer, Philip Hammond, remarked on the issue stating, “The OBR report released this morning highlights that even with the most favorable scenario in a no-deal departure, there would be a substantial blow to the UK economy, a significant decrease in tax revenues, and a considerable rise in national debt, resulting in a recession stemming from a no-deal Brexit.” Both major political parties in the UK have expressed readiness to handle a no-deal Brexit if it becomes necessary.
