Ministers were warned today to plan retraining programmes for tens of thousands of workers who will face the sack if Britain crashes out of the EU, crippling economic growth.
Leading economists said entire sectors of the economy, including the car industry, risk having to partially restructure if there is “no deal”.
The Organisation for Economic Co-operation and Development also forecast Britain’s economic growth would almost grind to a halt amid a bungled Brexit, rising by a miserly 0.5 per cent over 2019 and 2020.
Even if there is an orderly Brexit with close ties to the EU retained, the UK would still limp along at the bottom of Europe’s economic growth league table, with only crisis-hit Italy doing worse.
“It is imperative that the EU and the UK manage to strike a deal that maintains the closest possible relationship between the parties,” the OECD said. It stressed that “high access” for the City and exporters must be kept.
“The failure to come to a withdrawal agreement with the EU is by far the greatest risk in the short term [to the UK economy],” it added. “Temporary measures will be needed to cushion the economy and support displaced workers in the event of a no-deal exit.”
OECD analysis suggests this could wipe more than two per cent off GDP over two years. The UK is forecast to grow by just 1.1 per cent in 2020 after Brexit, against 1.5 per cent for France, 1.4 per cent for Germany, 3.4 per cent for Ireland, 1.9 per cent for Spain and 1.6 per cent for the EU as a whole, with Italy on 0.9 per cent. Brexiteers say the EU wants to ensure it can continue exporting to the UK, but the OECD said Brexit is “not a major macroeconomic risk” for the EU as a whole.
