Pound at risk in the event of a disorderly Brexit
The Office for Budget Responsibility also warns that the economic benefits of new trade deals with non-EU countries after Brexit may be negligible
London — The UK could experience shortages of vital imports, a sharp fall in the pound and higher prices in the shops in the event of a disorderly Brexit, according to the Office for Budget Responsibility. The fiscal watchdog issued the warning on Thursday in a paper outlining the task it faces to assess the economic and fiscal consequences of Britain leaving the European Union. Its current projections are based on the assumption that the two sides reach an agreement but a no-deal Brexit could hit the British economy hard, leading to higher budget deficits and government debt, the OBR said. “A disorderly exit is not impossible and it could have a severe short-term impact on demand and supply in the economy and on the public finances,” the OBR said. “UK asset prices could fall sharply which, together with heightened uncertainty, would cause households and businesses to rein in their spending. “A fall in the pound would also raise domestic prices, squeezing households’ real incomes an...
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