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The U.K.’s exit from the European Union may have already pushed the U.K. into a technical recession, according to the National Institute of Economic and Social Research.
In a gloomy set of new forecasts, Niesr predicted that, even assuming a smooth exit in October, the nation will grow 1% in 2019 and 1% in 2020. There’s an around a one-in-four chance that the economy is already shrinking, the think tank said.
The outlook worsens if there a no-deal Brexit, with Niesr seeing the possibility of a “severe” downturn in the event of a disorderly departure. Even if an “orderly” no deal exit is secured, Niesr says the economy will stagnate next year, with inflation accelerating to 4.1%.
“However we look at it, there will not be much economic joy in a no-deal Brexit,” said Niesr director Jagjit Chadha.
The pound fell after the report and traded at $1.2464 as of 10:08 a.m. in London.