Britain might be entering a full-blown recession and a no-deal Brexit could more than double the country's budget deficit next year.
ADVERTISEMENTBritain might be entering a full-blown recession and a no-deal Brexit could more than double the country's budget deficit next year.
This stark warning is coming from the Office for Budget Responsibility.
A no-deal Brexit would hurt confidence and deter investment and lead to higher trade barriers with the European Union, pushing down the value of the pound and causing the economy to contract by 2% by the end of 2020, the OBR said.
Philip Hammond, British finance minister: "The report that the OBR have published this morning shows that even in the most benign version of a no-deal exit, there would be a very significant hit to the UK economy, a very significant reduction in tax revenues, and a big increase in our national debt, a recession caused by a no-deal Brexit.
A no-deal Brexit - something the two contenders seeking to be Britain's next prime minister say they are prepared to do if necessary - could add over 33 billion euros a year to public borrowing by the 2020/21 financial year.
The OBR said the spending and tax cut promises made by Boris Johnson and Jeremy Hunt, one of whom is due to become prime minister next week, would put a strain on the budget.
