Is Brexit really a big deal?

PUBLIC LOANS in the UK could double in case of exiting from the EU without agreement, claims the UK Bureau of Budgetary Accountability (OBR).

In the case of Brexit reached without an agreement, the public debt could rise to 60 billion pounds, while in the case of Brexit, the deal would amount to 29.3 billion pounds, the BBC reported.

Possible recession

The above scenario is based on the assumption that going without a deal would lead the UK to a recession.

Britain officially leaves the EU on October 31 this year.

The chances of going out without an agreement have recently increased after both candidates for the post of Conservative Party have supported such an option.

OBR prognosis

OBR, which was set up with the goal of independent analysis of British public finances, used the IMF’s analysis of the first scenario of exit without agreement, according to which the British economy will be weakened by 2% in 2020, in order to recover in 2021.

This will follow the introduction of tariffs of 4% on products from the EU.

“Increased insecurity and a decline in self-confidence” will damage investment, while “trade barriers will make it more difficult for exports”, the OBR report says.

“These two factors together lead Great Britain into a recession, with substantially falling property prices and the value of a pound,” it added.

There is also a risk of inflation and an increase in the indebtedness of the public sector by 12% by 2024.

OBR added that this is not the most likely scenario, as is the worst possible case, and that both conservative candidates offer suggestions that “in the case of implementation, increase the government’s indebtedness by tens of billions of pounds.”

Opinions of politicians

The OBR forecasts proved to be milder than those of Bank of England and Britain’s treasuries, according to which Britain is threatened by a 8% fall in GDP and a recession from 2008 as well as a blow to the economy of £ 90 billion by 2035.

Eurosceptic politicians, such as Jacoba Rees-Mogg, call these forecasts “fools” and even predict the growth of the British economy after leaving the EU.

The head of the British treasury, Philip Hammond, argued, “that even the smallest form of going out without a deal would be a big blow to the British economy,” criticizing the leading Brexit people who “want to make it even harder.”

Fierce criticism at the expense of the conservative government was made by people from the two leading opposition parties, with Labusist John McDonnell saying “Brexit will, without agreement, leave an indelible mark on the British economy and public finances, and that it comes as a result of a failed approach to the economy in the last 9 years “.

Jeremy Hunt and Boris Johnson, candidates for successor Therese May at the post of Prime Minister, have tightened their stance on Brexit over the border, arguing that the only solution is the “hard border” between the UK and the EU on the island of Ireland.

The EU’s leading negotiator on Brexit’s issue, Michel Barnier, said that “the proposal of the agreement offered by Theresa May and how it was rejected three times was the only way for Britain to leave the EU properly.”

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