‘Doomsday’ tax cuts planned if there’s No Deal

CIVIL servants are preparing a ‘ Doomsday list’ of radical tax and tariff cuts amid warnings the economy faces its worst year since the financial crash.

The plans, dubbed ‘ Project After’, are being drawn up to minimise the shock of a No Deal Brexit in March.

One Whitehall source called the project, marshalled by Cabinet Secretary Mark Sedwill, a ‘Doomsare day list of economic levers’ that the Government could pull to stimulate the economy. News of the plan emerged as Bank of England Governor Mark Carney warned a ‘fog’ of confusion had descended on the country amid failure to agree a Brexit deal with Brussels. He said the Bank now expects the UK economy to expand by just 1.2 per cent in 2019 – its most sluggish performance since the depths of the recession in 2009 – even if a deal is clinched in the next few weeks. Making its previous forecast in November, the Bank said it expected growth of 1.7 per cent this year.

The Bank said it saw a onein-four chance of the economy slipping into recession in the second half of this year.

However, the European Commission also slashed its growth forecasts for the eurozone yesterday, with the economies of Germany, France and Italy all faltering. As a result, the UK economy is still set to outpace Germany this year, despite an expected slowdown.

Last night the Financial Times said ‘Project After’ was designed to minimise the impact of a No Deal departure. It reportedly involves senior figures from the Cabinet Office, the Treasury, the business and international trade departments, in close contact with the Bank of England. Although the project has been mentioned at Cabinet, its existence had not been made public.

In a briefing yesterday, Mr Carney warned consumer confidence, business investment and household spending all look weaker than predicted.

He said: ‘That fog of Brexit is causing short-term volatility in the economic data and, more fundamentally, it’s creating a series of tensions.

‘Although many companies stepping up their contingency planning, the economy as a whole is still not yet prepared for a No Deal, no-transition exit.’

Mr Carney also joked that his job is disturbing his sleep. Asked if he ever wakes up and regrets still being Governor, he replied: ‘Wake up in the morning? I wake up in the middle of the night.’

The gloomy predictions were announced by the Bank’s powerful Monetary Policy Committee as it unveiled a unanimous decision to hold interest rates at 0.75 per cent.

Business investment is expected to shrink by 2.75 per cent, while household investment is also expected to fall.

A DAY after Donald Tusk’s juvenile jibe, Mrs May entered her own ‘special place in Hell’ – gruelling talks with hardline Eurocrats intent on frustrating Brexit.

She did so on the back of gloomy economic warnings: Failure to strike a deal would cripple the Continent – harsh for the UK, but calamitous for a eurozone teetering precariously on the brink of recession.

But was the Prime Minister given a crumb of comfort on the sticking point – the loathed Irish backstop? Non, quelle surprise! Mr Tusk and his cronies seem blind to events in their own back yard. Surely this is no time for the EU to posture and play chicken.

Ideological intransigence in Brussels is being put before people’s jobs and lives.