Economic experts have today suggested the UK should reverse Brexit in order to avoid the severe consequences of a messy breakup.
The Organisation for Economic Co-operation and Development (OECD) published a report that puts forward the case for a dramatic rethink on the agenda.
Its findings have already been hailed as the “final nail in the coffin for the already long-buried notion that Brexit will benefit our economy”.
But even with EU negotiations stalled there are growing signs that the UK economy is on a shaky grounds.
The International Monetary Fund recently raised growth forecasts for all advanced economies aside from the UK in its twice yearly benchmark World Economic Outlook. The Washington-based organisation cited a slump in private consumption and a dramatic tumble in the value of the pound weighing on household spending.
But even the IMF’s downbeat forecast for the UK could be too optimistic. Here’s five indications that an economic collapse could be imminent for the UK.
ONE: A savings crisis looms
A report released today has warned that a savings crisis could be in our midst with a third of UK employees saving less than £50 a month and one in five not saving anything at all. The Lifetime Savings Challenge Report 2017 confirms that many people are struggling to get to the end of the month on their current pay packet, with many on the brink of financial collapse.
TWO: Brexit threatens to close access to key markets
Tariffs on imports and exports between the EU and UK could wipe tens of billions of pounds off UK economic growth, according to the OECD. A hard Brexit or no-deal could strangle key trade routes, see business investment withdrawn and make our current account deficit harder to finance. Heightened price pressures would also choke off private consumption, sending the economy into a downward spiral.
THREE: We don’t have as much money as we thought
Shock figures released by the Office of National Statistics (ONS) show that Britain is £490 billion poorer than was thought. Britain’s stock of wealth has fallen from a surplus of of £469 billion to a net deficit of £22 billion. The UK has totally lost its reserve of foreign assets, and is actually in a much more vulnerable deficit, losing any safety margin just Theresa May’s government is attempting a breakthrough in a crucial stage of Brexit negotiations.
FOUR: Inflation is hitting the nation’s spenders
Inflation hit a five-year high of 3 per cent this week, with a weak pound expected to continue pushing that up. Lower income families are likely to have been hit the hardest by price rises since Brexit due to the rise in the price of food and non-food essential items, which they spend disproportionately more on. The inflation squeeze on these families is likely to strangle the amount of money being circulated in the economy.
FIVE: Interest rate rise could tip us over the edge
Borrowers on variable rate mortgages could collectively have to pay millions of pounds more in mortgage payments by December if the Bank of England chooses to raise the base rate by 0.25 per cent. New research has revealed an interest rate hike could deal a final blow to many people living on the edge, replicating the sub-prime mortgage crisis of 2007.