No-deal Brexit could cost us £30bn, says OBR
The Office of Budget Responsibility (OBR) has estimated that borrowing could rise to £60bn if the UK leaves the EU without a deal. That is compared to an estimated figure for public borrowing estimated at £29.3bn if a deal was reached.
This assumes that the increased and prolonged uncertainty will trigger a recession, based on ‘heightened uncertainty’ that would deter investment, while higher trade barriers with the EU would ‘weigh on exports’. The pound is also predicted to drop sharply.
The likelihood of a no-deal exit appears to have increased recently, as both Conservative Leadership contenders have said they would leave the EU without a deal.
The OBR did stress though that this is not intended to be the most likely scenario, but also that there were also worse possibilities.
Businesses have been warned to prepare for a no-deal exit, though the form those preparations should take are not clear. According to the Institute of Directors, 23% of its members had put in place contingency plans between January and April 2019, but only 4% had increased those preparations when the exit was delayed.
If you’d like to discuss the implications of a no-deal Brexit on your business, or any other matters, please get in touch.