News

Oct 17, 2018

Bank warns no-deal could see UK sink into recession

A no-deal Brexit could send the pound plunging and trigger a worse recession than the financial crisis, the Bank of England has warned.

It said the UK economy could shrink by 8% in the immediate aftermath if there was no transition period, while house prices could fall by almost a third.

The Bank of England also warned the pound could fall by a quarter.

The Bank's analysis comes after the Treasury said the UK would be worse offunder any form of Brexit.

This Bank's scenario is not what it expects to happen, but represents a worst-case scenario, based on a so called "disorderly Brexit".

The scenario looks at the five-year period after the UK leaves the EU.

But by the end of 2023, the economy is expected to resume growing.