No-deal Brexit to wipe 2% off UK output initially, OBR says

A failure by Britain to agree a free trade deal with the European Union would wipe an additional 2% off the country's economic output initially, the Office for Budget Responsibility said on Wednesday.

A failure by Britain to agree a free trade deal with the European Union would wipe an additional 2% off the country's economic output initially, the Office for Budget Responsibility said on Wednesday. The OBR had already forecast that output would fall by 4% in the long run, compared to the country remaining in the European Union, if Britain secures a free trade agreement with the bloc.

It said it had now given a forecast for a no-deal exit given the continued uncertainty over the outcome of the negotiations, with Britain due to leave a status-quo transition period after Brexit on Dec. 31 and the two sides yet to agree new trade terms. "This would further reduce output by 2% initially and 1.5% at the forecast horizon," it said.