No Deal could cost economy £40billion

NO DEAL could tip the country into recession and shave £40billion off the economy, international forecasters warn.

Leaving the EU with no agreement would trigger a downturn that could hurt the UK and the eurozone, the Organisation for Economic Co-operation and Development claimed.

It has slashed its growth forecasts for Britain even if the country leaves with a deal.

The news came as the boss of huge City investment firm Legal & General called on politicians to back Theresa May’s deal.

Nigel Wilson argued that predictions of huge job losses due to Brexit had not come true.

He said her deal was ‘good for business, good for the economy and good for growth’.

Meanwhile, Bank of England Governor Mark Carney said his predictions of No Deal damage had been too gloomy.

The OECD said No Deal could knock 2 per cent, or £40billion, off the UK economy. It said there would be an economic hit even if disruption at the borders was kept to a minimum.

It now expects Britain to grow just 0.8 per cent in 2019, down from a prediction of 1.4 per cent in November. Growth of 0.9 per cent is expected for 2020, down from a forecast of 1.1 per cent.

But the research group Capital Economics said Britain may perform better than expected if a deal is agreed, adding: ‘The economy’s recent resilience suggests the UK is better placed to bounce back after Brexit and weather the global slowdown.’