Wednesday, February 19, 2020
ADVT 
International

UK Would Enter Recession In Case Of No-deal Brexit: Watchdog

Darpan News Desk IANS, 18 Jul, 2019
  • UK Would Enter Recession In Case Of No-deal Brexit: Watchdog

The UK's economy would slide into recession in 2020 if it leaves the EU without a deal, according to a report by the country's fiscal watchdog on Thursday.


The Office for Budget Responsibility (OBR), which provides independent economic advice to the British government, said the economy would lose two per cent in gross domestic product if the UK pulled out of the EU on October 31 without first securing a future agreement.


Both Conservative Party leadership candidates, Boris Johnson and Jeremy Hunt, have kept the no-deal Brexit option on the table.


"Heightened uncertainty and declining confidence deter investment, while higher trade barriers with the EU weigh on exports," said the OBR's report on its no-deal Brexit stress test.


"Together, these push the economy into recession, with asset prices and the pound falling sharply."


"Real GDP falls by 2 per cent by the end of 2020 and is 4 per cent below our March forecast by that point," according to the report cited by Efe news.


Such a scenario would push borrowing up to 30 billion pounds a year and would add 12 per cent GDP to net debt by 2023-24, both projected figures being higher than initially forecast in a report in March.


A no-deal scenario would raise trade barriers and prompt a fall in inward migration and productivity output.


"The imposition of tariffs and the sterling depreciation raise inflation and squeeze real household incomes, but the Monetary Policy Committee is able to cut Bank Rate to support demand," the report said.


It added that the Bank of England could think about lowering interest rates to counter inflation.


The UK had originally been slated to leave the bloc on March 29 but the process was delayed as the outgoing Prime Minister Theresa May failed to get backing for her withdrawal deal.


She is due to be replaced by one of the two leadership contenders by the end of the month.


Whoever takes over the Conservative Party and the office of Prime Minister will have to immediately tackle the issue of withdrawing from the EU. Brussels has until now stood firm that it would not compromise on the withdrawal deal.


The EU's top Brexit negotiator Michel Barnier said the UK would have to "face the consequences" if it decides to quit the bloc without an agreement.


He told the BBC that May's Brexit policy, which failed to make it through parliament three times, was the only way to ensure a smooth departure.


May faced backlash from members of her party who thought her withdrawal deal offered too many concessions to the EU.

MORE International ARTICLES

IAF Prepared To Fight Across Entire Spectrum Of Warfare: Air Force Chief B S Dhanoa

IAF Prepared To Fight Across Entire Spectrum Of Warfare: Air Force Chief B S Dhanoa

Air Force Chief B S Dhanoa spoke about the operational limitations that existed in 1999 and the innovative ways adopted by the IAF to overcome the difficulties during the conflict.

IAF Prepared To Fight Across Entire Spectrum Of Warfare: Air Force Chief B S Dhanoa

Great Pressure Exerted To Find Him: Donald Trump On Hafiz Saeed Arrest

Great Pressure Exerted To Find Him: Donald Trump On Hafiz Saeed Arrest

Terming Saeed as "so-called mastermind" of the Mumbai terror attacks, Trump said he has been arrested after a ten-year search.

Great Pressure Exerted To Find Him: Donald Trump On Hafiz Saeed Arrest

Toronto Man Who Lost Family In Ethiopian Plane Crash Testifies At US Congres

Toronto Man Who Lost Family In Ethiopian Plane Crash Testifies At US Congres

A Toronto man who lost his family in the crash of a Boeing 737 Max jet in Ethiopia called Wednesday for a stronger aircraft approval process in the U.S. and said more people would die if that type of plane was allowed to fly again.<

Toronto Man Who Lost Family In Ethiopian Plane Crash Testifies At US Congres

Huge Win For India: International Court Of Justice Orders Stay On Kulbhushan Jadhav's Execution

Huge Win For India: International Court Of Justice Orders Stay On Kulbhushan Jadhav's Execution

In a big victory for India and reprieve for Kulbhushan Jadhav, the International Court of Justice (ICJ) on Wednesday ordered Pakistan not to execute him and asked it to reconsider the sentence awarded to him by a military court.

Huge Win For India: International Court Of Justice Orders Stay On Kulbhushan Jadhav's Execution

Indian-Origin Man Avtar Grewal Drowns Wife Navneet Kaur In Bathtub For Seeking Divorce, Convicted

Indian-Origin Man Avtar Grewal Drowns Wife Navneet Kaur In Bathtub For Seeking Divorce, Convicted

The accused strangled her and then submerged her in a bathtub of water. He was arrested by international authorities and extradited back to the US, reports said.

Indian-Origin Man Avtar Grewal Drowns Wife Navneet Kaur In Bathtub For Seeking Divorce, Convicted

Pakistan Opens Its Airspace, Closed Since Balakot Strike

Pakistan Opens Its Airspace, Closed Since Balakot Strike

Airlines To Get Relief As Pakistan Lifts Complete Airspace Restrictions 

Pakistan Opens Its Airspace, Closed Since Balakot Strike