Preston Stanley - No-Deal Brexit Could Jeopardize Economic Recovery

Preston Stanley - Time running out as May struggles to gather support for Brexit draft deal.

Christine Lagarde, managing director of the International Monetary Fund (IMF), has repeatedly warned that in the event of a disruptive, no-deal departure of Britain from the European Union, the consequences for Britain’s economy would be severe and far-reaching.

Almost immediately after a no-deal Brexit, the U.K. economy would begin to shrink and would eventually lead to a bigger budget deficit and could cause depreciation of the pound.

Preston Stanley analysts say a no-deal Brexit would be as costly for the European Union as it would be for the United Kingdom and, on a broader scale, it could jeopardize the progress of an economic recovery that has been so hard-won over the last decade.

Echoing the concerns of the IMF is the U.K.’s central bank. With less than four months until Britain is due to leave the EU, the Bank of England (BoE) has likened the impact of a no-deal Brexit on Britain’s economy to that of the oil crisis that took place in the 1970s.

Some supporters of Brexit feel that a no-deal departure would eventually be an advantage for Britain’s economy, giving the world’s fifth-largest economy the opportunity and freedom to establish independent trade agreements more easily with countries outside of the European Union, but analysts at Preston Stanley say the BoE’s recent warnings may help garner the support needed by Prime Minister Theresa May to get parliamentary approval for her Brexit draft deal.

With time running out, Preston Stanley analysts say May still lacks the full support of her Conservative Party and if a no-deal Brexit takes place, the BoE has said that Britain’s economy will be almost four percent smaller by 2030 than if it had remained a member of the European Union.

Source: Preston Stanley

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