Pound at risk af­ter a dis­or­derly Brexit

Business Day - - INTERNATIONAL - An­drew Atkin­son

The UK could ex­pe­ri­ence short­ages of vi­tal im­ports, a sharp fall in the pound and higher prices in the shops in the event of a dis­or­derly Brexit, says the Of­fice for Bud­get Re­spon­si­bil­ity (OBR).

The fis­cal watch­dog is­sued the warn­ing on Thurs­day.

A no-deal Brexit could hit the Bri­tish econ­omy hard, lead­ing to higher bud­get deficits and gov­ern­ment debt, the of­fice said.

“A dis­or­derly exit is not im­pos­si­ble and it could have a se­vere short-term im­pact on de­mand and sup­ply in the econ­omy and on the pub­lic fi­nances,” the OBR said. “UK as­set prices could fall sharply which, to­gether with height­ened un­cer­tainty, would cause house­holds and busi­nesses to rein in spend­ing.”

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