As the UK parliament debates whether or not it should accept the draft deal on the country’s withdrawal from the European Union, the Bank of England has warned that without the deal a Brexit could cause a worse economic recession than the financial crisis.
British public broadcaster BBC reported that the Bank of England stated on Wednesday, November 28, that the UK economy could shrink by 8% in the immediate aftermath if there was no transition period, while house prices could fall by almost a third.
«These are scenarios not forecasts. They illustrate what could happen not necessarily what is most likely to happen,» explained Bank of England governor Mark Carney.
The Bank of England also warned the pound could fall by a quarter. The scenario looks at the five-year period after the UK leaves the EU and in it the economy is expected to resume growing by early 2024.