• Insurer’s Brexit warning: UK will plunge into three-year recession if there is no transition deal
By Emma Haslett
City A.M.’s digital editor. 25 June 2017
The UK will plunge into a three-year recession and an extra 3,300 small firms will go bankrupt if the government cannot negotiate a transition deal after Brexit, an insurer has warned.
Insurer Euler Hermes, part of Allianz, said the number of insolvencies will rise 15 per cent year on year to 25,100 businesses if the there is no transitional period after the conclusion of Brexit negotiations in 2019.
GDP will contract by 1.2 per cent, with the recession lasting until 2022, compared with 0.9 per cent growth if the UK does agree a transitional arrangement.
Meanwhile, exports will fall as much as £66bn, £30bn for goods and £36bn for services, the report said.
“In real terms this would mean a drop of six per cent for total exports on the previous year, according to the research. The report predicts that the level of inward investment in British companies would fall by eight per cent.”