S&P warns no-deal Brexit would trigger lengthy UK recession

Anca Alexe 31/10/2018 | 07:50

Global credit rating agency Standard & Poor’s has warned the UK that a no-deal Brexit would lead to rising unemployment and falling household incomes which would trigger a recession, the Guardian writes.

S&P’s scenario shows that property prices would drop and inflation would rise to more than 5 percent. The agency also said it might downgrade the UK’s credit rating, which would cause an increase in the Treasury’s borrowing costs.

The report says that the no-deal Brexit route would mean unemployment could go from the current all-time low of 4 percent to 7.4 percent by 2020; that house prices would fall by 10 percent in two years; household incomes would be GBP 2,700 lower per year; London office prices would fall by 20 percent in 2-3 years, as they did after the 2008 financial crash.

UK PM Theresa May has said that a Brexit deal with the EU is 95 percent done, but crucial area such as the Northern Ireland border remain unresolved. Negotiations are about to enter the final few weeks.