The report, entitled “Cost of No Deal”, paints a grim picture of possible repercussions for the UK if Brexit negotiations fail.
When asked about the damage the absence of a Brexit deal could cause the British economy, Dr. Portes said that the immediate impact of the “no deal” would leave the UK in “a legal limbo”
He added that food trade between the UK and EU would also suffer.
“We are not saying that all these things would necessarily happen, but there are definitely risks in the event of a no deal on Brexit,” Jonathan Portes said.
He added that, confronted by the prospect of a no deal and the possible economic damage this would entail, many in the UK could backtrack and favor a more gradual divorce process.
“Anyway, it is by no means certain what the political implications would be,” he noted.
When asked about the implications a no deal on Brexit could possibly have on the EU itself, Dr. Portes said that even though in terms of trade the UK would suffer more, the EU would also have to pay the price with a budget hole resulting from Britain’s exit from the bloc and the immediate cessation of UK contributions to the EU budget.
Meanwhile, many experts warn that the UK economy could see a further significant fall in exchange rates, wages, consumer demand and business confidence as a result of Brexit. This, in turn, could lead to a slowdown in investment.
The report comes as London and Brussels have concluded the latest round of Brexit negotiations with little progress. The sides retained major differences over the issue of citizens’ rights, the financial settlement and the Irish border.
Previously, British Prime Minister Theresa May repeatedly stated that “no deal is better than a bad deal” as the conditions proposed by the EU could be unsatisfying.