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A no-deal Brexit could push the UK into a recession , which could then spread through the global economy, according to the Organisation for Economic Co-operation and Development think tank.
In its latest economic outlook, the OECD said growth is expected to remain weak in the UK for the foreseeable future.
Based on a smooth Brexit and a transition period lasting until the end of 2020, the OECD has forecast GDP growth of below 1 per cent in the next two years.
However, a no-deal Brexit would reduce GDP by around 2 per cent in the UK for the next two years. The OECD said: “The effects could be stronger still if a lack of adequate border infrastructure and a loss of access to EU trade arrangements with third countries were to cause serious bottlenecks in integrated cross-border supply chains.”
The group said the costs associated with a cliff-edge departure from the EU could be magnified by a further decline in business and financial market confidence and disruption in financial markets.
"Brexit betrayal" march in LondonShow all 43 1 /43"Brexit betrayal" march in London "Brexit betrayal" march in London A protester holds an anti-BBC sign
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"Brexit betrayal" march in London A pro-brexit demonstrator holds a sign in the picket line
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"Brexit betrayal" march in London A protester carrying a noose at the "Brexit betrayal" march. The man carrying it told a reporter: "That's what the traitor May deserves."
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"Brexit betrayal" march in London Pro-brexit supporters hold a sign opposed to Nigel Farage
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"Brexit betrayal" march in London Protesters carry a defaced British flag on the march
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"Brexit betrayal" march in London Tommy Robinson addresses a rally after taking part in a Brexit 'betrayal' march in central London
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"Brexit betrayal" march in London Police officers attempts to keep rival protesters from clashing at the Brexit 'betrayal' march in London
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"Brexit betrayal" march in London A protester holds an anti-Theresa May sign
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"Brexit betrayal" march in London A pro-brexit demonstrator and his dog
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"Brexit betrayal" march in London A pro-brexit demonstrator at the protest
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"Brexit betrayal" march in London A pro-brexit sign at the rally
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"Brexit betrayal" march in London Pro-brexit demonstrators endorse UKIP
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"Brexit betrayal" march in London A Brexit 'betrayal' march protester wearing a Make Britain Great Again hat in London on 9 December 2018
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"Brexit betrayal" march in London Brexit 'betrayal' marchers gathering on Park Lane ahead of a protest
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"Brexit betrayal" march in London The "Brexit Betrayal" march passes through Central London
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"Brexit betrayal" march in London Tommy Robinson tells protesters to join Ukip via their mobile phones on stage next to leader Gerard Batten (right) at the Brexit 'betrayal' march
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"Brexit betrayal" march in London A protester speaks thorugh a megaphone on the march
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"Brexit betrayal" march in London A pro-brexit demonstrator walks in the picket line
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"Brexit betrayal" march in London A pro-brexit anti-May sign at the rally
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"Brexit betrayal" march in London A protester carries a Union Jack on the march
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"Brexit betrayal" march in London A pro-brexit demonstrator wrapped in the Union Jack
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"Brexit betrayal" march in London A pro-brexit anti-May sign at the rally
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"Brexit betrayal" march in London Pro brexit demonstrators move through Central London
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"Brexit betrayal" march in London A pro-brexit demonstrator marches with sign
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"Brexit betrayal" march in London A pro-brexit demonstrator holds a rude sign in the rally
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"Brexit betrayal" march in London The march passes down Victoria Street near Parliament
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"Brexit betrayal" march in London A festive protester marches near Parliament
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"Brexit betrayal" march in London A protester holds a mock noose as the march passes down Victoria Street towards Parliament
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"Brexit betrayal" march in London A protester wrapped in the Union Jack marches down Victoria Street towards Parliament
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"Brexit betrayal" march in London A protester makes some noise on the march
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"Brexit betrayal" march in London A protester dressed as a dinosaur holds a sign rallying against "Davocracy" - in reference to the annual World Economic Forum meeting in Davos
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"Brexit betrayal" march in London A protester holds a pro-brexit sign on the march
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"Brexit betrayal" march in London The march approaches parliament
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"Brexit betrayal" march in London A protester distributes pro-brexit lapel badges
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"Brexit betrayal" march in London A demonstrator wears an anti-EU poster and holds an anti-BBC sign
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"Brexit betrayal" march in London A smoke bomb is deployed in Parliament Square as the march comes across the counter-demonstration
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"Brexit betrayal" march in London
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"Brexit betrayal" march in London A flag bearing the Arms of Plantagenet flies in theprot
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"Brexit betrayal" march in London Protesters on the Brexit 'betrayal' march in London on 9 December 2018
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"Brexit betrayal" march in London Protesters on the Brexit 'betrayal' march in London on 9 December 2018
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"Brexit betrayal" march in London Brexit 'betrayal' marchers gathering on Park Lane ahead of a protest on 9 December 2018
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"Brexit betrayal" march in London Brexit 'betrayal' marchers gathering on Park Lane ahead of a protest on 9 December 2018
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"Brexit betrayal" march in London
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“In such a scenario, the likely near-term recession in the United Kingdom would generate sizeable negative spillovers on growth in other countries,” the OECD said.
Meanwhile, the think tank said the impact of trade arrangements on WTO terms would vary across the EU, with smaller countries like Ireland, the Netherlands and Denmark “relatively exposed”. The biggest impact would be felt in the agriculture, machinery and equipment sectors.
The OECD’s predictions echo previous warnings from the Bank of England , which last year said a no deal could plunge the UK into a larger recession that the global financial crisis 10 years ago if a no-deal Brexit goes ahead.
Based on the bank’s worst case scenario modelling, the UK economy would contract by 8 per cent, house prices would fall by a third, unemployment would spike to 7.5 per cent, interest rates would shoot up to 5.5 per cent and the value of the pound would fall to below $1.
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