The government will need to spend much more than previously estimated to limit the short-term damage to families and firms from a no-deal Brexit, adding £60bn to its borrowing in the first year alone, according to a report.
The document by the Resolution Foundation argues for a massive package of measures, including temporary tax cuts and emergency loans, to soften the impact. Even so, the think tank warns the measures will inevitably fall far short of eliminating the economic damage of an abrupt exit.
The scale of recommended spending is much larger than the amount the already-indebted government can borrow in the 2020-21 fiscal year without breaking its self-imposed borrowing limit.
“While there would be much discussion of the exact quantum of these interventions, the central issue is that they will need to be much more significant than many assume or than we used to,” the report says.
“Crucially, the background to that package would be significant deterioration in the public finances.”
1/50 18 September 2019
A surfer in action during sunrise at Tynemouth on the north east coast
PA
2/50 17 September 2019
Protesters dressed as the Incredible Hulk and Robocop outside the Supreme Court in London where judges are due to consider legal challenges to Prime Minister Boris Johnson’s decision to suspend Parliament. The Supreme Court will hear appeals over three days from two separate challenges to the prorogation of Parliament brought in England and Scotland
PA
3/50 16 September 2019
Farmer Tom Hoggard harvests pumpkins at Howe Bridge Farm in Yorkshire, ahead of Halloween
PA
4/50 15 September 2019
Team Europe celebrate winning the Solheim Cup at Gleneagles in Auchterarder, Scotland. Europe won the last three singles matches to claim victory 14½-13½
Getty
5/50 14 September 2019
Sunset at St Mary’s Lighthouse in Whitley Bay
PA
6/50 13 September 2019
Activists from PETA stage a demonstration outside a venue during London Fashion Week in London, Britain
Reuters
7/50 12 September 2019
Australia’s Marnus Labuschagne attempts to stop a boundary in the fifth Test
Action Images via Reuters
8/50 11 September 2019
Storm clouds gather over the pier just off the North East coast at South Shields
PA
9/50 10 September 2019
The peloton rides past the Angel of the North during stage four of the Tour of Britain from Gateshead to Kendal
PA
10/50 9 September 2019
A penny farthing cyclist rides past St. John’s, Smith Square, Westminster, London
PA
11/50 8 September 2019
Australia celebrate the wicket of England’s Craig Overton, which meant they won the fourth test and retained the Ashes
Action Images via Reuters
12/50 7 September 2019
Manchester City celebrate after Caroline Weir scored during their Women’s Super League match against Manchester United at Etihad Stadium. The WSL attendance record was smashed with 31,213 people watching the first Manchester derby of Women’s Super League era – nearly six times the previous WSL record
Getty
13/50 6 September 2019
A bull bumps into a plain clothes police officer (left) while being walked by Prime Minister Boris Johnson during his visit to Darnford Farm in Banchory near Aberdeen. It coincided with the publication of Lord Bew’s review and an announcement of extra funding for Scottish farmers
PA
14/50 5 September 2019
First Minister Nicola Sturgeon cuts the hair of David Torrance MSP raising £1000 for the charity Maggie’s Centre in Kirkcaldy at the Scottish Parliament in Edinburgh
PA
15/50 4 September 2019
Australia’s David Warner looks dejected after being dismissed by England’s Stuart Broad during day one of the fourth Ashes Test at Old Trafford in Manchester
Getty
16/50 3 September 2019
Anti Brexit demonstrators attend a protest at Parliament Square. Lawmakers returned from their summer recess Tuesday for a pivotal day in British politics as they challenged Prime Minister Boris Johnson’s insistence that the UK leave the European Union on 31 October, even without a withdrawal agreement to cushion the economic blow
AP
17/50 2 September 2019
Set building begins on Waterloo Place in Edinburgh ahead of filming for Fast and Furious 9
PA
18/50 1 September 2019
Members of the Royal Southern Yacht Club and the Island Sailing Club take part during the annual cricket match between the clubs, which takes place on the Bramble Bank sandbank in the middle of the Solent at low tide
PA
19/50 31 August 2019
Anti-Brexit protesters demonstrate at Whitehall in London
SWNS
20/50 30 August 2019
One of the iconic ‘Girl with Balloon’ artworks by anonymous street artist Banksy is carried near one of the original locations the artwork appeared at on the Southbank in London
AP
21/50 29 August 2019
The sun rises over the sculpture “The Couple” by artist Sean Henry, at Newbiggin-by-the-sea in Northumberland
PA
22/50 28 August 2019
A person wearing a Boris Johnson ‘head’ digs a grave at the foot of a tombstone during a protest organised by Avaaz and Best for Britain, outside Downing Street in London
PA
23/50 27 August 2019
Nat Lofthouse statue is covered in flags at the University of Bolton Stadium, Bolton
Action Images via Reuters
24/50 26 August 2019
Performers take part in Notting Hill Carnival. Nearly one million people were expected to attend Sunday and Monday’s carnival to celebrate Caribbean culture
AFP/Getty
25/50 25 August 2019
A competitor swims in the World Bog Snorkelling Championships in Llanwryd Wells, Powys
Reuters
26/50 24 August 2019
People flock to Bournemouth beach as a heatwave spells potentially record high temperatures for the bank holiday weekend
PA
27/50 23 August 2019
Fans of Bury FC deliver a symbolic coffin to the club’s home at Gigg Lane as the continuation of their membership to the football league lies in doubt. The club will lose their membership at midnight if they don’t find a buyer or prove that they have the means to pay off their debts
PA
28/50 22 August 2019
Labour Leader Jeremy Corbyn and Shadow DEFRA Secretary Sue Hayman during a visit to Rakefoot Farm, Castlerigg, Keswick where they are highlighting the danger of a No Deal Brexit to sheep farmers
PA
29/50 21 August 2019
Festival goers walk along the towpath of the River Thames as they arrive for the Reading Festival at Richfield Avenue
PA
30/50 20 August 2019
Police officers gather to pay their respects at the scene near Ufton Lane, where Thames Valley Police officer PC Andrew Harper, 28, died on Thursday. Jed Foster, 20, has appeared at Reading Magristrates’ Court where denied any involvement with the murder
PA
31/50 19 August 2019
A fire that broke out at the site of Village Bakery on Coed Aben Road, Wrexham Industrial Estate in Wales
Jord_wxm29/Twitter/PA
32/50 18 August 2019
England fielders crowd Pat Cummins as he see’s out the final over during day five of the second Ashes Test match against Australia at Lord’s Cricket Ground. The test ended in a draw
Getty
33/50 17 August 2019
Glew (centre) and Monroe Adams (right) pose for a selfie with a member of the public outside DragWorld London 2019, Europe’s largest drag convention, featuring drag stars from the US and UK during a two-day event at Olympia, London
PA
34/50 16 August 2019
A grey seal with fishing net tangled around its neck amongst the colony on the beach at Horsey in Norfolk, as RSPCA data show the number of animals affected by plastic litter is at an all-time high, with incidents increasing by 22% in just four years
PA
35/50 15 August 2019
A flock of sheep are herded past government buildings in London by members of Farmers for a People’s Vote, a campaign group
PA
36/50 14 August 2019
Swedish climate activist Greta Thunberg speaks during a press conference at the Mayflower Marina in Plymouth, southwest England, on August 14, 2019, ahead of her journey across the Atlantic to New York, aboard the Malizia II IMOCA class sailing yacht, where she will attend the UN Climate Action Summit next month. – A year after her school strike made her a figurehead for climate activists, Greta Thunberg believes her uncompromising message about global warming is getting through — even if action remains thin on the ground. The 16-year-old Swede, who sets sail for New York this week to take her message to the United States, has been a target for abuse but sees that as proof she is having an effect
AFP/Getty
37/50 12 August 2019
A hare runs on a moor near Ripon, North Yorkshire
PA
38/50 11 August 2019
Britain’s Jamie Chadwick wins first-ever W Series title. She pocketed a prize of £410,000 and, having been signed as a development driver for Williams, she keeps up her hopes of making it into Formula One
Getty
39/50 10 August 2019
People gather on the beach as a raft carrying people dressed as clowns heads to shore during the annual Whitby Regatta in Whitby, England. At over 170 years old, the Whitby Regatta is thought to be the oldest sea regatta on the northeast coast of England and draws thousands of visitors each year
Getty
40/50 9 August 2019
Burryman Andrew Taylor, gets a nip of whisky using a straw, from resident Mary Hamblin, 82, as he parades through the town of South Queensferry, near Edinburgh, encased in burrs. The parade takes place on the second Friday of August each year and although the exact meaning of this tradition has been lost through the years it is thought to have begun in the 17th Century. The tradition is believed to bring good luck to the towns people if they give him whisky offered through a straw or a donation of money
PA
41/50 8 August 2019
A mosque is seen amongst residential housing from the air during a mass take off at the annual Bristol hot air balloon festival in Bristol
Reuters
42/50 7 August 2019
An Asiatic lioness eats meat during feeding time ahead of World Lion Day at London Zoo
Reuters
43/50 6 August 2019
Beer enthusiasts taste beer and ale during The Great British Beer Festival at Kensington Olympia in west London. The Great British Beer Festival, organised by the Campaign for Real Ale (CAMRA), brings hundreds of real ales, international beers and real ciders and perries under one roof
AFP/Getty
44/50 5 August 2019
Australia’s Nathan Lyon celebrates after taking the wicket of England’s Joe Root during day five of the first Ashes test at Edgbaston. The hosts were on the end of a thumping, as Australia won the first test by 251 runs
Getty
45/50 4 August 2019
Franky Zapata stands on his jet-powered “flyboard” prior to landing on St. Margaret’s Bay in Dover, during his attempt to fly across the 35-kilometre (22-mile) Channel crossing. The Frenchman achieved his aim today, on his second attempt, after having spent years developing the jet-powered hoverboard
AFP/Getty
46/50 3 August 2019
A Cricket fan wears a Donald Trump inflatable, during day three of the first Ashes test cricket match between England and Australia at Edgbaston in Birmingham
AP
47/50 2 August 2019
An RAF Chinook helicopter flies in sandbags to help repair the dam at Toddbrook Reservoir which was damaged in heavy rainfall
PA
48/50 1 August 2019
Stuart Broad celebrates after taking the wicket of David Warner during day one of the first Ashes test between England and Australia at Edgbaston. England fans celebrated the loss of David Warner and Cameron Bancroft dismissals by waving sandpaper after they both faced bans for their roles in the Sandpaper scandal last year. Australia were all out for 284 after Steve Smith frustrated the hosts with a total of 144. He helped drag his side from 122-8
Getty
49/50 31 July 2019
A collapsed bridge near Grinton, North Yorkshire, after parts of the region had up to 82.2mm of rain in 24 hours on Tuesday
PA
50/50 30 July 2019
Acrobats Beren d’Amico, Louis Gift and Charlie Wheeller, from Barely Methodical Troupe perform a routine on Calton Hill in Edinburgh as they bring their debut show Bromance to the Edinburgh Fringe
PA
1/50 18 September 2019
A surfer in action during sunrise at Tynemouth on the north east coast
PA
2/50 17 September 2019
Protesters dressed as the Incredible Hulk and Robocop outside the Supreme Court in London where judges are due to consider legal challenges to Prime Minister Boris Johnson’s decision to suspend Parliament. The Supreme Court will hear appeals over three days from two separate challenges to the prorogation of Parliament brought in England and Scotland
PA
3/50 16 September 2019
Farmer Tom Hoggard harvests pumpkins at Howe Bridge Farm in Yorkshire, ahead of Halloween
PA
4/50 15 September 2019
Team Europe celebrate winning the Solheim Cup at Gleneagles in Auchterarder, Scotland. Europe won the last three singles matches to claim victory 14½-13½
Getty
5/50 14 September 2019
Sunset at St Mary’s Lighthouse in Whitley Bay
PA
6/50 13 September 2019
Activists from PETA stage a demonstration outside a venue during London Fashion Week in London, Britain
Reuters
7/50 12 September 2019
Australia’s Marnus Labuschagne attempts to stop a boundary in the fifth Test
Action Images via Reuters
8/50 11 September 2019
Storm clouds gather over the pier just off the North East coast at South Shields
PA
9/50 10 September 2019
The peloton rides past the Angel of the North during stage four of the Tour of Britain from Gateshead to Kendal
PA
10/50 9 September 2019
A penny farthing cyclist rides past St. John’s, Smith Square, Westminster, London
PA
11/50 8 September 2019
Australia celebrate the wicket of England’s Craig Overton, which meant they won the fourth test and retained the Ashes
Action Images via Reuters
12/50 7 September 2019
Manchester City celebrate after Caroline Weir scored during their Women’s Super League match against Manchester United at Etihad Stadium. The WSL attendance record was smashed with 31,213 people watching the first Manchester derby of Women’s Super League era – nearly six times the previous WSL record
Getty
13/50 6 September 2019
A bull bumps into a plain clothes police officer (left) while being walked by Prime Minister Boris Johnson during his visit to Darnford Farm in Banchory near Aberdeen. It coincided with the publication of Lord Bew’s review and an announcement of extra funding for Scottish farmers
PA
14/50 5 September 2019
First Minister Nicola Sturgeon cuts the hair of David Torrance MSP raising £1000 for the charity Maggie’s Centre in Kirkcaldy at the Scottish Parliament in Edinburgh
PA
15/50 4 September 2019
Australia’s David Warner looks dejected after being dismissed by England’s Stuart Broad during day one of the fourth Ashes Test at Old Trafford in Manchester
Getty
16/50 3 September 2019
Anti Brexit demonstrators attend a protest at Parliament Square. Lawmakers returned from their summer recess Tuesday for a pivotal day in British politics as they challenged Prime Minister Boris Johnson’s insistence that the UK leave the European Union on 31 October, even without a withdrawal agreement to cushion the economic blow
AP
17/50 2 September 2019
Set building begins on Waterloo Place in Edinburgh ahead of filming for Fast and Furious 9
PA
18/50 1 September 2019
Members of the Royal Southern Yacht Club and the Island Sailing Club take part during the annual cricket match between the clubs, which takes place on the Bramble Bank sandbank in the middle of the Solent at low tide
PA
19/50 31 August 2019
Anti-Brexit protesters demonstrate at Whitehall in London
SWNS
20/50 30 August 2019
One of the iconic ‘Girl with Balloon’ artworks by anonymous street artist Banksy is carried near one of the original locations the artwork appeared at on the Southbank in London
AP
21/50 29 August 2019
The sun rises over the sculpture “The Couple” by artist Sean Henry, at Newbiggin-by-the-sea in Northumberland
PA
22/50 28 August 2019
A person wearing a Boris Johnson ‘head’ digs a grave at the foot of a tombstone during a protest organised by Avaaz and Best for Britain, outside Downing Street in London
PA
23/50 27 August 2019
Nat Lofthouse statue is covered in flags at the University of Bolton Stadium, Bolton
Action Images via Reuters
24/50 26 August 2019
Performers take part in Notting Hill Carnival. Nearly one million people were expected to attend Sunday and Monday’s carnival to celebrate Caribbean culture
AFP/Getty
25/50 25 August 2019
A competitor swims in the World Bog Snorkelling Championships in Llanwryd Wells, Powys
Reuters
26/50 24 August 2019
People flock to Bournemouth beach as a heatwave spells potentially record high temperatures for the bank holiday weekend
PA
27/50 23 August 2019
Fans of Bury FC deliver a symbolic coffin to the club’s home at Gigg Lane as the continuation of their membership to the football league lies in doubt. The club will lose their membership at midnight if they don’t find a buyer or prove that they have the means to pay off their debts
PA
28/50 22 August 2019
Labour Leader Jeremy Corbyn and Shadow DEFRA Secretary Sue Hayman during a visit to Rakefoot Farm, Castlerigg, Keswick where they are highlighting the danger of a No Deal Brexit to sheep farmers
PA
29/50 21 August 2019
Festival goers walk along the towpath of the River Thames as they arrive for the Reading Festival at Richfield Avenue
PA
30/50 20 August 2019
Police officers gather to pay their respects at the scene near Ufton Lane, where Thames Valley Police officer PC Andrew Harper, 28, died on Thursday. Jed Foster, 20, has appeared at Reading Magristrates’ Court where denied any involvement with the murder
PA
31/50 19 August 2019
A fire that broke out at the site of Village Bakery on Coed Aben Road, Wrexham Industrial Estate in Wales
Jord_wxm29/Twitter/PA
32/50 18 August 2019
England fielders crowd Pat Cummins as he see’s out the final over during day five of the second Ashes Test match against Australia at Lord’s Cricket Ground. The test ended in a draw
Getty
33/50 17 August 2019
Glew (centre) and Monroe Adams (right) pose for a selfie with a member of the public outside DragWorld London 2019, Europe’s largest drag convention, featuring drag stars from the US and UK during a two-day event at Olympia, London
PA
34/50 16 August 2019
A grey seal with fishing net tangled around its neck amongst the colony on the beach at Horsey in Norfolk, as RSPCA data show the number of animals affected by plastic litter is at an all-time high, with incidents increasing by 22% in just four years
PA
35/50 15 August 2019
A flock of sheep are herded past government buildings in London by members of Farmers for a People’s Vote, a campaign group
PA
36/50 14 August 2019
Swedish climate activist Greta Thunberg speaks during a press conference at the Mayflower Marina in Plymouth, southwest England, on August 14, 2019, ahead of her journey across the Atlantic to New York, aboard the Malizia II IMOCA class sailing yacht, where she will attend the UN Climate Action Summit next month. – A year after her school strike made her a figurehead for climate activists, Greta Thunberg believes her uncompromising message about global warming is getting through — even if action remains thin on the ground. The 16-year-old Swede, who sets sail for New York this week to take her message to the United States, has been a target for abuse but sees that as proof she is having an effect
AFP/Getty
37/50 12 August 2019
A hare runs on a moor near Ripon, North Yorkshire
PA
38/50 11 August 2019
Britain’s Jamie Chadwick wins first-ever W Series title. She pocketed a prize of £410,000 and, having been signed as a development driver for Williams, she keeps up her hopes of making it into Formula One
Getty
39/50 10 August 2019
People gather on the beach as a raft carrying people dressed as clowns heads to shore during the annual Whitby Regatta in Whitby, England. At over 170 years old, the Whitby Regatta is thought to be the oldest sea regatta on the northeast coast of England and draws thousands of visitors each year
Getty
40/50 9 August 2019
Burryman Andrew Taylor, gets a nip of whisky using a straw, from resident Mary Hamblin, 82, as he parades through the town of South Queensferry, near Edinburgh, encased in burrs. The parade takes place on the second Friday of August each year and although the exact meaning of this tradition has been lost through the years it is thought to have begun in the 17th Century. The tradition is believed to bring good luck to the towns people if they give him whisky offered through a straw or a donation of money
PA
41/50 8 August 2019
A mosque is seen amongst residential housing from the air during a mass take off at the annual Bristol hot air balloon festival in Bristol
Reuters
42/50 7 August 2019
An Asiatic lioness eats meat during feeding time ahead of World Lion Day at London Zoo
Reuters
43/50 6 August 2019
Beer enthusiasts taste beer and ale during The Great British Beer Festival at Kensington Olympia in west London. The Great British Beer Festival, organised by the Campaign for Real Ale (CAMRA), brings hundreds of real ales, international beers and real ciders and perries under one roof
AFP/Getty
44/50 5 August 2019
Australia’s Nathan Lyon celebrates after taking the wicket of England’s Joe Root during day five of the first Ashes test at Edgbaston. The hosts were on the end of a thumping, as Australia won the first test by 251 runs
Getty
45/50 4 August 2019
Franky Zapata stands on his jet-powered “flyboard” prior to landing on St. Margaret’s Bay in Dover, during his attempt to fly across the 35-kilometre (22-mile) Channel crossing. The Frenchman achieved his aim today, on his second attempt, after having spent years developing the jet-powered hoverboard
AFP/Getty
46/50 3 August 2019
A Cricket fan wears a Donald Trump inflatable, during day three of the first Ashes test cricket match between England and Australia at Edgbaston in Birmingham
AP
47/50 2 August 2019
An RAF Chinook helicopter flies in sandbags to help repair the dam at Toddbrook Reservoir which was damaged in heavy rainfall
PA
48/50 1 August 2019
Stuart Broad celebrates after taking the wicket of David Warner during day one of the first Ashes test between England and Australia at Edgbaston. England fans celebrated the loss of David Warner and Cameron Bancroft dismissals by waving sandpaper after they both faced bans for their roles in the Sandpaper scandal last year. Australia were all out for 284 after Steve Smith frustrated the hosts with a total of 144. He helped drag his side from 122-8
Getty
49/50 31 July 2019
A collapsed bridge near Grinton, North Yorkshire, after parts of the region had up to 82.2mm of rain in 24 hours on Tuesday
PA
50/50 30 July 2019
Acrobats Beren d’Amico, Louis Gift and Charlie Wheeller, from Barely Methodical Troupe perform a routine on Calton Hill in Edinburgh as they bring their debut show Bromance to the Edinburgh Fringe
PA
In July, then-chancellor Philip Hammond said the government will need to borrow more than £27bn to respond to the immediate disruption of a no-deal Brexit.
The amount pales in comparison with the numbers set out in the latest Resolution Foundation report.
It calls for a £40bn spending spree in 2020-21 to increase demand in the economy, through steps such as a temporary VAT cut, an increase in benefits and new investment. The government should pour another £20bn into support for companies, such as one-year government-guaranteed emergency loans and a grace period on some business taxes.
According to the report, the extra spending will have the biggest impact on public borrowing in the first year and will then increase it by a smaller £40bn in 2021-22 and by £15bn in 2022-23.
The Resolution Foundation says these measures will be required in a no-deal scenario because households and firms are likely to cut back on spending “in the face of significant uncertainty in the near term and a reduction in earnings in the long term”.
Another shock will come from the sudden increase in barriers to trade with Britain’s biggest trading partner, the EU.
The economy will have more adjusting to do once the UK and the EU agree on their new permanent relationship – “one much less open than the status quo today but more open that seen in the immediate aftermath of a no-deal exit”, the think tank notes.
“In the longer term, a less open, less productive economy will be one in which incomes, asset values, and living standards will grow more slowly.”
