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UK may already be in recession

Joanna Faith
Written By:
Posted:
22/07/2019
Updated:
22/07/2019

The Brexit deadline isn’t until the end of October – but the UK could already be in a technical recession, a leading think tank has warned.

The National Institute of Economic and Social Research (NIESR) said there is around a one in four chance that the economy is in a technical recession, which is defined as two consecutive quarters of negative economic growth.

If a no-deal Brexit is avoided, the UK economy is forecast to grow at around 1 per cent in 2019 and 2020 as uncertainty holds back investment and productivity growth remains weak.

In an orderly no-deal scenario, the economy is expected to stagnate, before starting to grow again in 2021.

However, a disorderly no-deal Brexit could lead to a “severe downturn”.

“The outlook beyond October, when the United Kingdom is due to leave the European Union, is very murky indeed with the possibility of a severe downturn in the event of a disorderly no-deal Brexit,” NIESR said.

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Boris Johnson, the current front-runner to replace Theresa May as UK prime minister this week, has vowed to ensure Brexit happens by the 31 October deadline.