The Organisation for Economic Co-operation and Development (OECD) has warned a disruptive no-deal Brexit could start a recession and it could spill out across the global economy.
OECD warned a no-deal EU exit will see around 2% off UK growth over the next two-years, the major international think tank cautioned effects would be “stronger still” with a disorderly withdrawal from the EU.
The think tank’s latest economic outlook forecast’s a “near-term recession” is on the cards with the UK crashing out of the EU.
Currently there is a lack of adequate border infrastructure and with third countries there is a loss of access to EU trade agreements.
The OECD said, “In such a scenario, the likely near-term recession in the United Kingdom would generate sizeable negative spillovers on growth in other countries.
“Although contingency measures to soften the impact of a no-deal outcome are being taken by both sides, UK-EU separation without an agreement would still be a major adverse shock for Europe and possibly elsewhere in the world, given that the United Kingdom is an important trading partner for many countries.”
The OECD has slashed their growth forecast to 0.8% for 2019 and 0.9% for 2020, down from the projected respectively 1.4% and 1.1% in November for the UK.
The European Central Bank and the Bank of England has been urged to be “ready to intervene” should the UK end up with a disruptive exit.