Brexit: The Fate of the UK Economy
The United Kingdom is potentially standing at the brink of recession. The warning couldn’t have been any clearer from the Bank of England. A no-deal Brexit can send the British pound on a long downward spiral, resulting in a recession that could potentially prove to be worse than the 2008 financial crisis. The devastating effects can potentially shrink the UK economy by eight percent.
The UK Treasury has suggested that any form of Brexit will leave the UK worse off than staying under the European Union.
“Our deal is the best deal available for jobs and our economy, that allows us to honor the referendum and realize the opportunities of Brexit” stated PM May.
Forecasts show that compared to staying in the EU, under Prime Minister May’s plan, the UK economy could shrink by 3.9 percent. However, without a transition period, the consequences could prove to be much worse. The Governor of the Bank of England, Mark Carney, stated his concerns, “ It is in the interests of the country that there should be a transition to whatever new relationship the UK has with the EU.”
December 11th will be the day when the House of Commons votes on the government’s Brexit deal. Such a vote will undoubtedly decide the fate of the country.
However, there have been serious oppositions to this economic forecast. Former Brexit Secretary David Davis stressed the fact that Treasury forecasts have been proven to be far from the reality in the past and said many of those forecasts are based on “ flawed assumptions.”
Additionally, conservative Member of the Parliament and Brexiter Jacob Rees-Mogg also voiced his rejections towards such forecasts, claiming that the “project fear” has become “ project hysteria.” He added that “leaving the European Union is a real economic opportunity and it’s an opportunity that neither the Bank of England nor the Treasury in its forecasts wishes to recognize.”
Chancellor Philip Hammond believed that the planned Brexit deal combined economic benefits which the UK would have enjoyed under the EU along with additional political benefits of leaving the EU. He stated, “The economy will be slightly smaller in the prime minister’s preferred version of the future partnership.” He went on to add that staying under the EU was not politically “viable.”