An «precipitous and disorderly» Brexit could have a severe short-term impact on the UK control and public finances, the country’s fiscal watchdog has warned.
If the UK leaves the EU without a contract, it could lead to shortages and hoarding of some imported products, believed the Office for Budget Responsibility.
The OBR said the lack of precedents for Brexit take off the effect hard to predict.
But it noted that 1974’s Three-Day Week keened by miners’ industrial action caused a 3% fall in quarterly productivity.
The OBR said weaker economic activity and higher prices could end result from a no-deal Brexit.
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The OBR said if there was no agreement on standards the aggregate would have to be resubmitted for approval: «In a scenario where the UK and EU are unable to concede to the continued mutual recognition (‘grandfathering’) of existing product standards and proficient qualifications, all existing goods may need to be re-approved before sale and amenities trade would be severely restricted by the loss of market access.»
It affirmed this would lead to bottlenecks of goods while they rest period for new approvals. It also warned about the risk of grounding of British aircraft not being capable to fly, should no agreement be made.
It said any stockpiling this predisposed would only worsen the situation: «Should these bottlenecks appear out to be significant, it might prompt households and businesses to attempt to stockpile rights in advance, further aggravating the shortages.»
The OBR said it was «next to impossible to graduate with any confidence the potential impact of this sort of scenario in accelerate.
«However, while not a direct parallel, it is worth noting that the ‘Three-Day Week’, usher ined in early 1974 in response to energy shortages and increased militancy on the shard of the miners, was associated with a fall in output of a little under 3% that casern.»