No Deal ‘would be chaotic and damaging’

BRITAIN risks a ‘chaotic and damaging’ Brexit if there is no deal with the EU, MPs warn today.

Members of the Commons Brexit Select Committee say Theresa May must amend her Chequers plan if the EU will not accept it and caution that ‘no-deal’ would ‘leave many businesses facing huge uncertainty’.

Their report urges the PM to consider staying in a customs union and the European Economic Area (EEA) as a potential fallback position.

But the conclusions were rejected by several of the committee’s Eurosceptic members, including Tory MP Jacob Rees-Mogg.

The chairman of the pro-Brexit European said reverting to World Trade Organisation rules if there is no trade deal would not be as bad as the report suggests – and would even deliver some advantages.

However, the International Monetary Fund (IMF) warned yesterday of the disastrous consequences for the British economy of a ‘no deal’ Brexit, including a potential recession.

The pound could plummet and the economy could go into reverse, IMF chief Christine Lagarde claimed.

The former French minister added that there could be severe disruption to trade, with air travel and movement of goods at risk.

Mrs Lagarde said: ‘Our assumption is it would have very dear economic consequences. It would be a shock to supply and it would inevitably have a series of consequences in terms of reduced growth going forward, increased deficit, most likely a depreciation of the currency.

‘It would, in reasonably short order, mean a reduction in the size of the UK economy.’

The IMF predicted that Britain’s economy will grow by 1.5 per cent this year and next if Britain leaves the European Union with a deal.

But Mrs Lagarde, 62, claimed that Britain will be worse off outside the EU regardless of what deal is struck.

She said: ‘All the likely Brexit scenarios will have costs for the economy and to a lesser extent as well for the EU.’

Labour MP Hilary Benn, chairman of the Brexit Select Committee, said with time running out to secure a withdrawal agreement with the EU, there were ‘significant problems yet to be resolved’.

Number 10 has repeatedly ruled out staying in the EEA, which would keep Britain in the single market.