Brexit: ‘Serious’ hit to UK economy from failure to reach trade deal with EU, warns OECD
A no-deal Brexit at the end of 2020 would deliver a “serious” short-term hit to the UK economy and produce a “strongly negative” effect on trade, productivity and jobs in the long term, the OECD has warned.
The Organisation for Economic Co-operation and Development said that disruption from failure to conclude a trade deal with the EU would come as the UK grapples with the impact of a second wave of coronavirus.
The international economic thinktank downgraded its outlook for the UK economy, estimating an 11.2 per cent fall in GDP for 2020, followed by a slower-than expected recovery, with growth of 4.2 per cent next year and 4.1 per cent in 2022.
With just 30 days to go to the UK leaving the EU’s single market and customs union, talks on a future relationship remain in stalemate over access to fishing stocks in British territorial waters and Brussels’ demand for a level playing field on standards.
The government’s official forecaster, the Office for Budget Responsibility, has projected a 2 percentage point reduction in GDP in 2021 if no deal is in place by 31 December.