A no-deal Brexit could push the UK into a recession, which could then spread through the global economy, according to a new report from the Organisation for Economic Co-operation and Development (OECD).
In its latest economic outlook, the think tank said growth is expected to remain weak in the UK for the foreseeable future.
Based on a smooth Brexit and a transition period that lasts until the end of 2020, the OECD has forecast GDP growth of below 1 per cent in the next two years.
However, a no-deal Brexit would reduce GDP by around 2 per cent in the UK for the next two years, and the OECD added: “The effects could be stronger still if a lack of adequate border infrastructure and a loss of access to EU trade arrangements with third countries were to cause serious bottlenecks in integrated cross-border supply chains.”
The group said the costs associated with a cliff-edge departure from the EU could be magnified by a further decline in business and financial market confidence and disruption in financial markets.
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A protester carrying a noose at the “Brexit betrayal” march. The man carrying it told a reporter: “That’s what the traitor May deserves.”
Tim Ireland/AP
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A protester holds an anti-BBC sign
Angela Christofilou/The Independent
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Tommy Robinson addresses a rally after taking part in a Brexit ‘betrayal’ march in central London
PA
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A pro-brexit demonstrator holds a sign in the picket line
Angela Christofilou/The Independent
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A protester holds an anti-Theresa May sign
Angela Christofilou/The Independent
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A pro-brexit demonstrator and his dog
Angela Christofilou/The Independent
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Protesters carry a defaced British flag on the march
Angela Christofilou/The Independent
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Police officers attempts to keep rival protesters from clashing at the Brexit ‘betrayal’ march in London on 9 December 2018
Victoria Jones/PA
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Pro-brexit demonstrators endorse UKIP
Angela Christofilou/The Independent
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Pro-brexit supporters hold a sign opposed to Nigel Farage
Angela Christofilou/The Independent
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Tommy Robinson tells protesters to join Ukip via their mobile phones on stage next to leader Gerard Batten (right) at the Brexit ‘betrayal’ march on 9 December 2018
Gareth Fuller/PA
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A pro-brexit demonstrator walks in the picket line
Angela Christofilou/The Independent
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A protester carries a Union Jack on the march
Angela Christofilou/The Independent
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A pro-brexit demonstrator wrapped in the Union Jack
Angela Christofilou/The Independent
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A pro-brexit demonstrator at the protest
Angela Christofilou/The Independent
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A Brexit ‘betrayal’ march protester wearing a Make Britain Great Again hat in London on 9 December 2018
Chris J Ratcliffe/Getty
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The “Brexit Betrayal” march passes through Central London
Angela Christofilou/The Independent
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A protester speaks thorugh a megaphone on the march
Angela Christofilou/The Independent
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A pro-brexit sign at the rally
Angela Christofilou/The Independent
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A pro-brexit anti-May sign at the rally
Angela Christofilou/The Independent
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Pro brexit demonstrators move through Central London
Angela Christofilou/The Independent
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A pro-brexit anti-May sign at the rally
Angela Christofilou/The Independent
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A pro-brexit demonstrator marches with sign
Angela Christofilou/The Independent
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A pro-brexit demonstrator holds a rude sign in the rally
Angela Christofilou/The Independent
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The march passes down Victoria Street near Parliament
Angela Christofilou/The Independent
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A festive protester marches near Parliament
Angela Christofilou/The Independent
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A protester holds a mock noose as the march passes down Victoria Street towards Parliament
Angela Christofilou/The Independent
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A protester wrapped in the Union Jack marches down Victoria Street towards Parliament
Angela Christofilou/The Independent
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A protester makes some noise on the march
Angela Christofilou/The Independent
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A protester dressed as a dinosaur holds a sign rallying against “Davocracy” – in reference to the annual World Economic Forum meeting in Davos
Angela Christofilou/The Independent
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A protester holds a pro-brexit sign on the march
Angela Christofilou/The Independent
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The march approaches parliament
Angela Christofilou/The Independent
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A protester distributes pro-brexit lapel badges
Angela Christofilou/The Independent
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A demonstrator wears an anti-EU poster and holds an anti-BBC sign
Angela Christofilou/The Independent
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A smoke bomb is deployed in Parliament Square as the march comes across the counter-demonstration
Angela Christofilou/The Independent
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A flag bearing the Arms of Plantagenet flies in theprot
Angela Christofilou/The Independent
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Protesters on the Brexit ‘betrayal’ march in London on 9 December 2018
Angela Christofilou/ The Independent
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Protesters on the Brexit ‘betrayal’ march in London on 9 December 2018
Angela Christofilou/ The Independent
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Brexit ‘betrayal’ marchers gathering on Park Lane ahead of a protest on 9 December 2018
Angela Christofilou/ The Independent
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Brexit ‘betrayal’ marchers gathering on Park Lane ahead of a protest on 9 December 2018
Angela Christofilou/ The Independent
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Brexit ‘betrayal’ marchers gathering on Park Lane ahead of a protest on 9 December 2018
Angela Christofilou/ The Independent
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A protester carrying a noose at the “Brexit betrayal” march. The man carrying it told a reporter: “That’s what the traitor May deserves.”
Tim Ireland/AP
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A protester holds an anti-BBC sign
Angela Christofilou/The Independent
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Tommy Robinson addresses a rally after taking part in a Brexit ‘betrayal’ march in central London
PA
4/41
A pro-brexit demonstrator holds a sign in the picket line
Angela Christofilou/The Independent
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A protester holds an anti-Theresa May sign
Angela Christofilou/The Independent
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A pro-brexit demonstrator and his dog
Angela Christofilou/The Independent
7/41
Protesters carry a defaced British flag on the march
Angela Christofilou/The Independent
8/41
Police officers attempts to keep rival protesters from clashing at the Brexit ‘betrayal’ march in London on 9 December 2018
Victoria Jones/PA
9/41
Pro-brexit demonstrators endorse UKIP
Angela Christofilou/The Independent
10/41
Pro-brexit supporters hold a sign opposed to Nigel Farage
Angela Christofilou/The Independent
11/41
Tommy Robinson tells protesters to join Ukip via their mobile phones on stage next to leader Gerard Batten (right) at the Brexit ‘betrayal’ march on 9 December 2018
Gareth Fuller/PA
12/41
A pro-brexit demonstrator walks in the picket line
Angela Christofilou/The Independent
13/41
A protester carries a Union Jack on the march
Angela Christofilou/The Independent
14/41
A pro-brexit demonstrator wrapped in the Union Jack
Angela Christofilou/The Independent
15/41
A pro-brexit demonstrator at the protest
Angela Christofilou/The Independent
16/41
A Brexit ‘betrayal’ march protester wearing a Make Britain Great Again hat in London on 9 December 2018
Chris J Ratcliffe/Getty
17/41
The “Brexit Betrayal” march passes through Central London
Angela Christofilou/The Independent
18/41
A protester speaks thorugh a megaphone on the march
Angela Christofilou/The Independent
19/41
A pro-brexit sign at the rally
Angela Christofilou/The Independent
20/41
A pro-brexit anti-May sign at the rally
Angela Christofilou/The Independent
21/41
Pro brexit demonstrators move through Central London
Angela Christofilou/The Independent
22/41
A pro-brexit anti-May sign at the rally
Angela Christofilou/The Independent
23/41
A pro-brexit demonstrator marches with sign
Angela Christofilou/The Independent
24/41
A pro-brexit demonstrator holds a rude sign in the rally
Angela Christofilou/The Independent
25/41
The march passes down Victoria Street near Parliament
Angela Christofilou/The Independent
26/41
A festive protester marches near Parliament
Angela Christofilou/The Independent
27/41
A protester holds a mock noose as the march passes down Victoria Street towards Parliament
Angela Christofilou/The Independent
28/41
A protester wrapped in the Union Jack marches down Victoria Street towards Parliament
Angela Christofilou/The Independent
29/41
A protester makes some noise on the march
Angela Christofilou/The Independent
30/41
A protester dressed as a dinosaur holds a sign rallying against “Davocracy” – in reference to the annual World Economic Forum meeting in Davos
Angela Christofilou/The Independent
31/41
A protester holds a pro-brexit sign on the march
Angela Christofilou/The Independent
32/41
The march approaches parliament
Angela Christofilou/The Independent
33/41
A protester distributes pro-brexit lapel badges
Angela Christofilou/The Independent
34/41
A demonstrator wears an anti-EU poster and holds an anti-BBC sign
Angela Christofilou/The Independent
35/41
A smoke bomb is deployed in Parliament Square as the march comes across the counter-demonstration
Angela Christofilou/The Independent
36/41
A flag bearing the Arms of Plantagenet flies in theprot
Angela Christofilou/The Independent
37/41
Protesters on the Brexit ‘betrayal’ march in London on 9 December 2018
Angela Christofilou/ The Independent
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Protesters on the Brexit ‘betrayal’ march in London on 9 December 2018
Angela Christofilou/ The Independent
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Brexit ‘betrayal’ marchers gathering on Park Lane ahead of a protest on 9 December 2018
Angela Christofilou/ The Independent
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Brexit ‘betrayal’ marchers gathering on Park Lane ahead of a protest on 9 December 2018
Angela Christofilou/ The Independent
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Brexit ‘betrayal’ marchers gathering on Park Lane ahead of a protest on 9 December 2018
Angela Christofilou/ The Independent
“In such a scenario, the likely near-term recession in the United Kingdom would generate sizeable negative spillovers on growth in other countries,” the OECD said.
Meanwhile, the think tank said the impact of trade arrangements on WTO terms would vary across the EU, with smaller countries like Ireland, the Netherlands and Denmark “relatively exposed”. The biggest impact would be felt in the agri-food and machinery and equipment sectors.
The OECD’s predictions echo previous warnings from the Bank of England, which said last year that the UK could be plunged into a larger recession that the global financial crisis 10 years ago if a no-deal Brexit goes ahead.
Based on the Bank’s worst case scenario modelling, the UK economy would contract by 8 per cent, house prices would fall by a third, unemployment would spike to 7.5 per cent, interest rates would shoot up to 5.5 per cent and the value of the pound would fall to below $1.
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