Bank of England warns “no-deal” Brexit would be worse than 2008 crash
Labour pledges to rescue British capitalism
3 December 2018
The Bank of England (BoE) has published an analysis warning that the UK could face economic collapse and chaos as the result of a “no-deal” Brexit. According to the BoE’s “worst case scenarios,” gross domestic product could fall as much as 10.5 percent over a five-year period, the official rate of unemployment could nearly double to 7.5 percent, inflation could rise to 6.5 percent, house prices could fall by 30 percent, commercial property prices could collapse by up to 48 percent, and the pound could fall to parity with the US dollar.
Such levels of economic dislocation and collapse have no precedent since World War II and far outstrip the impact of the 2008 economic crash.
The worst-case scenarios are based on a “no-deal” Brexit with no transition period, meaning the UK would leave the EU on March 29, 2019 and be forced to revert to World Trade Organization rules for trading with Europe and the rest of the world. The worst case presumes that there would be custom checks on the UK’s border for goods, with the UK unable to reach new trade deals with the EU or other countries until 2023.
While the bank said these scenarios were “not necessarily what is most likely to happen,” its analysis comes less than four months before the UK’s scheduled EU exit, under conditions where the proposed deal between Prime Minister Theresa May and the EU has not yet been agreed by the British parliament. Tomorrow a five-day debate on the agreement will begin, with a vote to be taken on December 11.
As it stands, there is no parliamentary arithmetic under which May can get the deal through parliament in the first vote,…