The United Kingdom would dive into recession, the pound would collapse and prices of goods would rocket in case of a no-deal Brexit, cautioned credit ratings agency Moody’s, which foresees a higher probability of such a situation. The exchange rate fall would give way to a temporary higher inflation and the impact on retail would be ‘substantial’, it said.
The prospect of the United Kingdom leaving the European Union without any agreement has “risen materially”, said Colin Ellis, Moody’s chief credit officer and co-author of a Moody’s report.The United Kingdom would dive into recession, the pound would collapse and prices of goods would rocket in case of a no-deal Brexit, cautioned credit ratings agency Moody's, which foresees a higher probability of such a situation. The exchange rate fall would give way to a temporary higher inflation and the impact on retail would be 'substantial', it said.#
The wage squeeze over the next two to three years resulting from inflation would impact consumer spending and depress growth, a report in a leading British daily cited the document as saying.
Unemployment would rise, the British treasury would be hit by lower tax revenue and the United Kingdom could “fall into recession very quickly,” it said.
The sectors most affected would be automotive, airline, aerospace and chemicals. The impact on the retail sector would be ‘substantial’ as higher World Trade Organisation tariffs take their toll. (DS)
Fibre2Fashion News Desk – India
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