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Brexit May Have Already Pushed U.K. Into Recession, Niesr Says

Economy Jul 22, 2019 05:30AM ET
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© Bloomberg. Pedestrians carrying umbrellas to shelter from the rain walk past a Maplin Electronics Ltd. retail store on Tottenham Court Road in London, U.K., on Tuesday, May. 29, 2018. U.K. consumer confidence slid this month as Britons felt less secure about their jobs and the value of their houses.

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The U.K.’s exit from the European Union may have already pushed the U.K. into a technical recession, according to the National Institute of Economic and Social Research.

In a gloomy set of new forecasts, Niesr predicted that, even assuming a smooth exit in October, the nation will grow 1% in 2019 and 1% in 2020. There’s an around a one-in-four chance that the economy is already shrinking, the think tank said.

The outlook worsens if there a no-deal Brexit, with Niesr seeing the possibility of a “severe” downturn in the event of a disorderly departure. Even if an “orderly” no deal exit is secured, Niesr says the economy will stagnate next year, with inflation accelerating to 4.1%.

“However we look at it, there will not be much economic joy in a no-deal Brexit,” said Niesr director Jagjit Chadha.

The pound fell after the report and traded at $1.2464 as of 10:08 a.m. in London.

Brexit May Have Already Pushed U.K. Into Recession, Niesr Says
 

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