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'More optimistic' OBR forecast more likely than severe recession, says economist

Posted by Warwick Business School at 18 July 2019, 12:44 CET |
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Expert comment from Dr Ivan Petrella, associate professor of economics at Warwick Business School

The Office for Budgetary Responsibility (OBR) has a predicted a recession in the event of a 'no deal' Brexit, with economic growth likely to fall by two per cent by the end of 2020.

"The Office for Budgetary Responsibility is forecasting a short term contraction of GDP, leading to a temporary recession in 2020. This is a much more optimistic assessment of the potential dangers of a 'no deal' Brexit than the Bank of England, the Treasury, and most commentators are currently predicting.

"I think the short term impact projected by the OBR is a much more likely outcome than the severe recession predicted by the Bank of England.

"However, I am more pessimistic on the medium term impact of a 'no deal' exit. I strongly believe that the uncertainty associated with a rushed 'no deal' exit is likely to have a more prolonged negative impact on the economy."

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