Brexit May Lead to UK Property Crash And Depression
The comments below are an edited and abridged synopsis of an article by Mark O’Byrne
Britain would be plunged into its deepest recession since the 1930s under a disorderly no-deal Brexit, the Bank of England has warned.
House prices could fall by 30%, interest rates rise to 5.5% and the economy shrink by 8%—a greater contraction than after the 2008 financial crisis—its worst-case scenario showed.
Ben Broadbent, one of the Bank’s deputy governors, said that this would be worse than any crisis since “we went back on gold” and the economy subsequently crashed in 1930. In the 2008 financial crisis, the British economy shrank by6.3%.
The Bank gave its assessment hours after a Whitehall analysis suggested that the economy would shrink under all versions of Brexit.
While the BOE’s latest warnings are alarmist, O’Byrne concurs with Mark Carney’sadvice to hope for the best but to prepare for the worst by re-balancing investment and pension portfolios and owning physical gold.