In its quarterly inflation report, published today, the Bank of England has warned that even with the smoothest possible Brexit there is a 1/3 chance of a UK recession. Also published today, the IHS Markit PMI for UK Manufacturing showed that production in the sector fell to its lowest in seven years.
Commenting on both reports, Liberal Democrat Treasury and Business Spokesperson Chuka Umunna MP said:
“Today the Bank of England confirms what the Liberal Democrats have been saying from the start: that any form of Brexit will weaken our economy. Now we know that even a so-called ‘smooth’ Brexit has a 1/3 chance of sending us into recession.
“On top of that, it is perfectly clear that Brexit is already harming our economy: the manufacturing sector is nearing record lows and the pound is trapped in sharp decline. How can the Tory Government claim they can end austerity and grow the economy when their policy of Brexit is pushing it to the brink?
“The Liberal Democrat message is now more urgent than ever: give the people a final say, stop Brexit, and with the country back on track, fix the economy. The Government must follow our call now, before more damage is done.”
The Bank also revised down its GDP growth forecasts, to 1.3% for 2019 and 2020, from 1.5% and 1.6% respectively in its last projections in May. This is due to growing Brexit uncertainty coupled with slow global growth.
This morning the pound fell below $1.21, for the first time since January 2017. It has since resumed trading just above $1.21, after a minor rally into the BoE’s midday publication.