The impact of Brexit on next week’s UK budget has been spelled out by one of Britain’s leading economic forecasters, with the difference between a soft and no-deal outcome worth £30bn over the next five years for Philip Hammond.
According to the National Institute of Economic and Social Research (NIESR), the chancellor could increase spending on public services above and beyond the £20bn promised for the NHS – but only if Britain retains the closest possible relationship with the EU following its departure.
The Guardian reports that the NIESR warned that a no-deal Brexit would erode almost all of this extra spending firepower and cause public borrowing to rise, while also warning that the pound would fall in value, inflation would rise and the economy would barely grow for two years.
The stark difference for the public finances from a deal or no-deal Brexit is likely to become an increasingly important political battleground over the coming months, and could feature heavily at the budget on Monday.
