What’s the story?
A no deal Brexit risks wiping out the recovery made by the UK since the economic crash in 2008. Read more in the Independent
How reliable is the story?
Reliable. The warning is from the International Monetary Fund (IMF) -- an international economic body -- and matches other warnings about a no deal Brexit.
What’s the background?
In its annual health check of the UK economy, the International Monetary Fund (IMF) warned that a no deal Brexit would entail substantial costs. Evidence
The organisation stated that all Brexit scenarios would have a negative impact on the UK economy, and the more disruptive the Brexit, the worse the effect. Evidence
It is predicted that for every 1% that GDP declines, there will be a 0.4% increase in the UK’s budget deficit. Evidence
The effects will be worse if Brexit disproportionately damages tax rich sectors, such as finance, which is more likely to happen in a no deal scenario. Evidence
Moreover, migrants from other EU countries to the UK are net contributors to the UK economy, and reducing EU migration will likely have a negative impact on the UK tax take. Evidence
The IMF warned all of this will far exceed any savings made from ending contributions to the EU. Evidence
Philip Hammond, Chancellor of the Exchequer, endorsed this analysis, warning that no-deal Brexit will wipe out any gains made from £141 billion of cuts and tax rises. Evidence
- This comes just a week after the chancellor warned that a no deal Brexit under the current government would result in further austerity. Evidence
image courtesy EU2017EE Estonian Presidency via flickr
This Behind the Headlines Briefing was first published on the DoorstepEU app: http://www.richardcorbett.org.uk/app