No-deal to spark economic shock

Crashing out will harm EU members, says OECD

A NO-DEAL Brexit could plunge the UK into recession and trigger shockwaves across Europe, a report out yesterday warned.

The Organisation for Economic Co-operation and Development slashed its forecast for UK growth this year from 1.4 per cent to 0.8 per cent – the weakest rate since the financial crisis a decade ago.

That figure is based on a “smooth Brexit” and a transition period until the end of 2020.

The OECD warned that the outlook was “significantly weaker” if the UK left the EU without a deal.

Doing so, and reverting to World Trade Organisation rules on tariffs, could wipe two per cent off economic growth over the next two years, it said.

The Paris-based body added: “In up 12.6 LOGGERHEADS May and McDonnell such a scenario, the likely near-term recession in the UK would generate sizeable negative spillovers on growth in other countries.”

It warned of a “major adverse shock for Europe, and possibly elsewhere in the world”.

The report comes before a crunch Commons vote on Prime Minister Theresa May’s Brexit deal next week.

Shadow Chancellor John McDonnell said the downgrade highlighted “the impact of a botched at 7196.0 Oil Ferguson 5342.0 -12.0 GlaxoSmithKline 1509.2 -6.8 Halfords 247.8 +0.2 Hays 156.4 -0.1 HSBC 623.2 -0.2 Imperial Brands 2608.5 +32.0 International Airlines Grp572.2 -2.8 ITV 134.4 +0.1 Kingfisher 246.5 -1.7 Land Securities 906.6 -2.4 Legal & General 275.5 -10.7 Lloyds 62.9 -0.0 Marks & Spencer 279.3 +2.5 Morrison 229.3 -0.7 National Grid 845.0 -5.0 Next 5210.0 +6.0 Ocado 1054.5 +8.5 Pearson 824.0 -8.0 Prudential 1607.0 -19.0 Reckitt Benckiser 6045.0 +54.0 = $65.65 Brexit and sustained austerity”. However, the OECD said Brexit is only one factor in the forecast, given the slowdown in the eurozone.

Others will also point to previous doom-laden warnings from economists after the 2016 Brexit vote that proved to be wrong.

Bank of England Governor Mark Carney said this week the UK is now better prepared for a no-deal Brexit.

The OECD cut its growth forecast in the eurozone from 1.8 per cent to one per cent this year, and from 1.6 per cent to 1.2 per cent in 2020.

Predicted growth in Germany, which relies on exports, was more than halved to 0.7 per cent.

The OECD cut its global forecast by 0.2 per cent to 3.3 per cent this year amid Donald Trump’s trade rows with China and the EU. RELX 1677.4 Rentokil Initial 355.6 Rio Tinto 4478.0 Rolls-Royce 900.0 Royal Dutch Shell B 2387.0 Royal Mail 265.6 RSA 523.0 RBS 261.5 J Sainsbury 232.7 SSE 1204.0 Severn Trent 2039.0 Serco 136.5 Sports Direct 265.3 Smith & Nephew 1463.0 Smiths WH 2138.0 Stagecoach 166.4 Standard Chartered 631.4 Standard Life Aberdeen 250.0 TalkTalk 100.5 Taylor Wimpey 183.6 +19.4 -3.1 +36.5 -13.0 0.0 -2.6 +1.0 +1.6 +1.7 -4.0 +1.0 +0.2 -3.9 -2.5 -2.0 -0.6 -1.7 -0.7 -2.0 -0.9 Tesco Thomas Cook Unilever United Utilities Vodafone Reach PLC 232.2 33.2 4046.0 852.6 134.1 66.0 +0.3 +0.5 -26.5 -1.6 +0.1 +1.0