NIESR: One in four chance UK might already be in recession
Britain might have already fallen into a technical recession, an influential think tank has warned this morning, as it forecasts growth of one per cent even if a no-deal Brexit is avoided.
The National Institute of Economic and Social Research (NIESR) has said there is a one-in-four chance that the UK economy has already slipped into a technical recession.
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In its report released today, the NIESR is predicting the economy to grow by roughly one per cent per year over the course of 2020 and 2021, with uncertainty expected to hit investment and productivity growth.
However, in the event of Britain leaving the EU without a deal, the group has said the UK would suffer a “severe downturn”.
“The outlook beyond October, when the United Kingdom is due to leave the European Union, is very murky indeed with the possibility of a sever downturn in the event of a disorderly no-deal Brexit”.
The gloomy estimates come several days after the UK’s public finances watchdog warned that a no-deal Brexit could plunge Britain into a year-long recession and shrink the economy by two per cent next year.
Britain may already be on the verge of a “full-blown” recession but crashing out of the European Union without a deal would damage growth further, the Office for Budget Responsibility (OBR) said last week in a health-check on the economy.
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Later today voting in the Tory leadership contest is set to close, with expectations that Boris Johnson will beat Jeremy Hunt to succeed Theresa May as Britain’s next Prime Minister.
Johnson’s pledge to take Britain out of the EU with or without an agreement by the end of October has caused market analysts to raise their expectations of a no-deal Brexit over the months ahead.