The Bank of England’s forecasts show no Brexit scenario where the UK economy does not shrink – but don’t expect it to shift the parliamentary numbers.
A no-deal Brexit would see the pound and GDP nosedive and inflation, unemployment and interest rates skyrocket, the Bank of England has warned, in the most apocalyptic of a series of forecasts it has released ahead of the meaningful vote on the withdrawal agreement.
The Bank’s five-year forecasts cover a range of Brexit scenarios, of which those for a no-deal are, unsurprisingly, the bleakest. Mark Carney, its governor, said the result would be a deeper recession than that which followed the financial crash in 2008.
Should the United Kingdom experience a “disorderly” Brexit without a divorce or transition, the Bank forecasts that GDP would drop by 8 per cent, unemployment would rise to 7.5 per cent, house prices would fall by 30 per cent, inflation would spike to 6.5 per cent and the Bank would hike interest rates to 5.5 per cent. Sterling would drop to 25 per cent below parity with the dollar and a dramatic rise in the number of people leaving the UK would see net migration go from positive to negative.
