A No Deal Brexit will force the UK into Recession

A No Deal Brexit will force the UK into recession with equity prices, property prices and sterling falling 'sharply' for the next 5 years or so according to the Office for Budget Responsibility (OBR) in its worst case scenario of a disorderly, No Deal Brexit in its Fiscal Risks report July 2019.

Investment into the UK will be slashed and tougher trade barriers with the European Union in the event of a no-deal Brexit will plunge the country into a recession.  That said, if there is stimulus, like in the Credit Crunch of 2008/09 or as and when trade deals come on line, the economy will recover,

The OBR's Fiscal Risks report, forecasts that real GDP will fall by 2% by the end of 2020, while the UK's debt will sky rocket.  The OBR predicts government revenue down with a combination of lower taxes and lower revenue from other sources in 2020/21 by £31.4 billion, then £35.5 billion, £32.1 billion and £23.8 billion in the following 3 years.  That’s 4 years of recession to come.

The Fiscal Risks report also suggests that house prices may fall by 15% over the next 3 years before starting to recover.  

Comment

The OBR’s report is a fascinating read and the tables of charts and forecasts from page 255 onwards are an 'eyeopener' for all.  This is a must read.

Read/download the OBR Fiscal Risks Report July 2019 - https://obr.uk/docs/dlm_uploads/Fiscalrisksreport2019.pdf