The UK government has been warned of a recession in the absence of a Brexit deal with the EU. Lawmakers have voted to block the path of any future Conservative leader trying to force through a no-deal exit.
The British government's own financial watchdog has assessed that a no-deal Brexit would send Britain into a recession, shrinking the economy by 2% by the end of next year and taking unemployment above 5%. House prices could fall by around 10%.
The Office for Budget Responsibility (OBR) is a non-departmental public body that the UK government established to provide independent economic forecasts and independent analysis of public finances.
The OBR also said a yearlong downturn could increase government borrowing by more than €33 billion ($37 billion).
Lawmakers have passed a motion effectively preventing the government from sending them home in the weeks before October 31
International Chamber of Commerce
The International Chamber of Commerce (ICC) reacted to the findings. ICC Secretary-General Chris Southworth told LBC radio in London on Thursday: "Why would you leave the premiership of trade, which is the Single Market, to trade on a less preferential set of terms in what would be the first division? It doesn't make any sense."
"Our international audience are flabbergasted by what we're doing, particularly as it's a voluntary decision," Southworth said. "The UK would be the only country to trade exclusively on World Trade Organization (WTO) rules."
He added that the UK would have to negotiate trade deals with 120 countries: "No one has ever done that, certainly not at the scale and pace we are proposing to do it. And the average time to negotiate a trade deal is 5-7 years."
Current finance minister Philip Hammond voiced similar concerns: "The report that the OBR have published this morning shows that even in the most benign version of a no-deal exit there would be a very significant hit to the UK economy, a very significant reduction in tax revenues and a big increase in our national debt — a recession caused by a no-deal Brexit."
New Conservative leader set for parliamentary battle
Boris Johnson, the front-runner to succeed Prime Minister Theresa May, has said that if he becomes prime minister, Britain will withdraw from the EU by the delayed exit date of October 31 even if a deal has not been reached.
In another move on Thursday, UK lawmakers passed a motion that effectively stops the government from sending them home in the weeks before the planned October 31 exit.
The 315-274 vote in the House of Commons on Thursday afternoon saw a number of government ministers, including Hammond, abstain rather than support the government's call to keep the suspension of Parliament as an option.
"We're putting down a marker," Conservative lawmaker Alistair Burt, who co-sponsored the move, said on Thursday. "Parliament can't be bypassed."
law,es/jm (dpa, Reuters)