Britain's economy could be pushed into a recession and real GDP could fall by 2% by the end of 2020 in the event of a no-deal Brexit, the Office for Budget Responsibility has warned.

The OBR, in its fiscal risks report, quantified the impact on the public finances of a no-deal, no-transition Brexit scenario.



In the executive summary, the OBR said: "Heightened uncertainty and declining confidence deter investment, while higher trade barriers with the EU weigh on exports.

"Together, these push the economy into recession, with asset prices and the pound falling sharply. Real GDP falls by 2% by the end of 2020 and is 4% below our March forecast by that point.

"Higher trade barriers also slow growth in potential productivity, while lower net inward migration reduces labour force growth, so potential output is lower than the baseline throughout the scenario (and beyond).

"The imposition of tariffs and the sterling depreciation raise inflation and squeeze real household incomes, but the Monetary Policy Committee is able to cut Bank Rate to support demand, helping to bring output back towards potential and inflation back towards target."

The Office for Budget Responsibility is a non-departmental public body that the UK government established to provide independent economic forecasts and independent analysis of the public finances.