Considering Ireland’s close relationship with the UK, this is not good news.
The Bank of England has warned that a no-deal Brexit could trigger a worse recession than the financial crisis of 2008.
The Bank said that a no-deal Brexit could cause the UK economy to shrink by 8% if there’s no transition period.
According to the Bank’s analysis, house prices could fall by 30% and the unemployment rate could increase to 7.5%, while interest rates could be forced to rise as inflation increased to 6.5%.
While it stated they did not expect this to happen, it said this is a worst case scenario facing the UK if they exit the European Union next year without a deal.
On Theresa May’s draft withdrawal agreement, the Bank of England said it had the potential to encourage a bounce for economic growth over the next five years.
However, they said this was dependent on the UK maintaining the closest possible trading relationship with the EU.
“These are scenarios not forecasts. They illustrate what could happen not necessarily what is most likely to happen.
“Taken together the scenarios highlight that the impact of Brexit will depend on the direction, magnitude and speed of the effect of reduced openness of the UK economy,” Bank of England governor Mark Carney said.
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