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One of the world’s most prominent forecasters predicts Britain will crash out of the EU without a trade deal beritamalay3.blogspot.com

REUTERS/Peter Nicholls

Britain’s Prime Minister Theresa May toasts The Royal Family before she delivers a speech at the Lord Mayor’s Banquet, at the Guildhall, London, Britain November 14, 2016.

LONDON — UK economic growth will slow sharply next year before Britain leaves the EU in 2019 without a trade deal, according to the Organisation for Economic Cooperation and Development.

The Paris-based policy group predicts in its latest UK forecast that GDP growth will weaken slightly to 1.6% in 2017 then slow dramatically to 1% in 2018.

The gloomy forecast is driven by the OECD’s assumption that Britain will leave the EU without a trade deal and fall back onto restrictive World Trade Organisation (WTO) tariffs, classified as a “most-favoured nation.”

Economists have warned that a “cliff-edge” Brexit scenario whereby the UK fails to secure a deal would be economically destructive.

The OECD said: “This projection assumes that the United Kingdom’s external trade will operate on a ‘most favoured nation’ basis from April 2019.

“The uncertainty, and the assumed outcome, is projected to undermine spending, in particular investment. Policies have supported private confidence and consumption, but household spending is projected to ease as the combination of a weakening labour market and higher inflation reduces real wage growth.”

Many other G7 countries saw their 2018 growth prospects upgraded in the OECD’s latest round of forecasts.

The group now predicts that only Italy from the G7 group of rich countries will perform worse than the UK next year.

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