No-deal Brexit will undo entire economic recovery since financial crash, says Philip Hammond
3 min read
Leaving the European Union without a deal would put the entire economic recovery since the 2008 financial crash at risk, Philip Hammond has claimed.
The Chancellor risked the fury of Tory eurosceptics as he seized on a prediction by the International Monetary Fund that the UK would face a "significantly worse" outlook under a no-deal Brexit than if Theresa May reaches agreement with the EU.
He said: "Leaving without a deal would put at risk the substantial progress the British people have made over the last 10 years in repairing our economy.
"We must lock in economic progress we’ve made. We must heed IMF warnings about consequences that not making a deal will have for jobs and the economy."
Unveiling its annual predictions for the UK economy, the IMF said it expected growth of 1.5% a year in 2018 and 2019 if the Government managed to strike a Brexit agreement.
But, speaking to reporters at the Treasury on Monday, the body's managing director Christine Lagarde said: "Those projections assume a timely deal with the EU on a broad free trade agreement and a relatively orderly Brexit process after that."
She added: "The larger the impediments to trade in the new relationship, the costlier it will be.
"This should be fairly obvious, but it seems that sometimes it is not."
Ms Lagarde's warning has already sparked the ire of Brexiteers, with Tory MP Nadine Dorries branding her a "prophet of doom".
But Mr Hammond - who eurosceptics have frequently accused of mounting a 'Project Fear' campaign to undermine Brexit - said the IMF had been "clear" that a 'No Deal' outcome "would be extremely costly for the UK".
He added: "That is why it is so important for people up and down this country, that we reach a negotiated agreement on our future relationship over the coming weeks."
Anti-Brexit campaigners were meanwhile quick to pounce on the IMF's forecast.
Labour MP Owen Smith of the People's Vote campaign said: "The IMF’s verdict is that Brexit has already made us less well-off and will damage our future prospects for years to come.
"The IMF say that before we have even left Brexit is putting up prices in the shops and driving away business investment.
"Whether it is Theresa May’s Chequers Car Crash or Jacob Rees-Mogg’s No Deal Disaster the IMF can find nothing positive in Brexit."
The gloomy prediction came as Theresa May challenged Tory MPs to back her controversial Chequers Brexit plan or see the UK leave the European Union without a deal.
Some MPs hope that killing off Chequers will force the government to renegotiate. But, asked what would happen if MPs voted down her deal in Parliament, a defiant Mrs May told the BBC: "I think that the alternative to that will be having no deal."
BEST
Labour MP David Lammy of the anti-Brexit Best for Britain campaign said: "The IMF report proves beyond doubt that the Tories' plans would act as a sledgehammer to the UK economy. The substantial costs would weigh disproportionately on those with the least."
A spokesman for the Prime Minister distanced himself from Mr Hammond's gloomy prediction.
He said: "In relation to our own position, we have set out that we’re confident of reaching a deal with the European Union, that we’re making progress to achieve that goal.
"But you also heard from the Prime Minister this morning, she said very clearly ‘Brexit gives us an opportunity to deliver a sovereign, independent Britain and that our best days are ahead of us. We are putting in place plans which will allow the UK to succeed in all scenarios’."
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