No-deal fears hitting hard...

Experts warn of ‘murky outlook’ for UK

THE threat of a no-deal Brexit could have already tipped the UK into recession, a top forecaster has warned.

The National Institute of Economic and Social Research (NIESR) put the possibility at one in four, as it reckons growth has already stalled.

The UK’s outlook was “very murky indeed” if it left the EU without a deal, it said in a report that suggested millions of families will be hit in the pocket.

Even in the event of an “orderly” Brexit, inflation could more than double to 4.2% next year, it says, with unemployment up to 4.4%.

Experts consider a recession as being two consecutive quarters of economic contraction. The NIESR predicts the economy shrank by 0.1% in the second quarter – April to June.

It still reckons the economy will “narrowly avoid” going backwards in July to September, but with a one in four risk of it contracting.

The prediction comes on the day the Tory Prime Minister is announced, with front-runner Boris Johnson saying he would ramp up preparations for a no-deal exit.

Jagjit Chadha, director of the NIESR, warned any such move would effectively “throw concrete” in the wheels of British trade.

In its report, the think tank said: “The outlook beyond October, when the UK is due to leave the EU, is very murky indeed with the possibility of a severe downturn in the event of a disorderly no-deal Brexit.”

But critics will point to various gloomy predictions about the economy before the Brexit vote in 2016. Yet employment continued to rise and the jobless rate has falling.

The NIESR cut its forecasts for Britain’s economic growth in 2019 and 2020 to 1.2% and 1.1%, down from 1.4% and 1.6% previously.

Even if the new PM strikes a Brexit deal, there will likely be a hit to public finances, the NIESR said.