As the Government released its economic impact assessments on Brexit, the Bank of England warn that a no deal Brexit could plunge country into recession.
Chancellor Phillip Hammond has also conceded that there is no future involving Brexit in which the UK will not be worse off economically.
The analysis states Public sector net borrowing could be forced up by as much as £119 billion and the UK economy would be 9.3% smaller after 15 years if Britain leaves without a deal and falls back on World Trade Organisation rules, compared with remaining in the EU.
Commenting on the news, Rain Newton-Smith, CBI Chief Economist, says: “These forecasts paint a bleak picture over the long-term of a no deal Brexit or a Canada-style deal. It surely puts to bed some of the more far-fetched ideas that a hard landing Brexit will not seriously hurt the economy.
“This is about real people’s lives and jobs in the years ahead and it’s clear to business that while the Government’s deal is not perfect, it certainly fits the bill in reducing short-term uncertainty and opens up a route to a decent trade deal in the future.
“Politicians of all parties should speak to businesses in their constituency to hear about the impact a bad Brexit will have on them and their workforce. And the longer a ‘no deal’ scenario remains possible, the more corrosive the impact on jobs and investment plans.”
The Federation of Small Businesses (FSB) National Chairman Mike Cherry, says: “These figures paint a stark picture of the impact a no deal Brexit will have on the economy and suggest what many have been warning about.
“Put simply, a chaotic no deal Brexit will damage jobs, cut growth and hurt the economy. This cliff edge will disproportionately be felt by our smaller businesses that do not have the same capacity or resources as big businesses to make adequate contingency plans to soften the impact of this scenario or to deal with the costs of suddenly trading on the basis of WTO rules from April 2019 and having to complete customs declarations.
“With only one in seven small firms planning for this extreme outcome, it represents a clear and present threat. With time ticking ever faster, our smaller businesses need support and advice to start planning. The Government can help with this by following the lead of Ireland and Netherlands and issuing Brexit advice vouchers or considering other forms of financial and non-financial support that small firms can use to help prepare.”