Brexit All items

According to the British Central Bank would make a disorderly Brexit the UK economy harder than the recent financial crisis. The Bank of England (BoE), in a scenario to the EU from the outlet, that the economy would shrink performance within one year of the eight percent . For comparison: In the financial crisis, it was 6.25 per cent.

The economic downturn would be due to two things:

the fear effects of the congestion at the customs offices, and a loss of confidence in the markets.

The unemployment would increase due to the decline in Growth rates after assessment of the BoE significantly. Also in the financial markets, the Central Bank expects violent reactions. So the British pound is expected to fall by 25 percent to the US Dollar. The significant decline of the pound is likely to keep the inflation rate at 6.5 per cent rise. The Central Bank would be to increases then forced a significant interest rate. In the top of the key interest rate could rise to 5.5 percent.

DPA Brexit: answers to all the important questions

The Central Bank does not see this Chaos scenario, but the most likely variant. Nevertheless, it considers that it is “plausible,” and has urged the banks in the country, to make appropriate arrangements for this. “The British banking system is strong enough to house hold and the economy continues to serve – even if it should come to a disorderly Brexit”, writes the BoE.

The Central Bank had studied the capital strength of the following seven banks:

Barclays, HSBC, Lloyds, Nationwide Building Society, Royal Bank of Scotland (RBS), Santander UK and Standard Chartered.

No, the banks need fresh capital, even if it should come to a disorderly exit.

warning from the government

The British government has with the EU, a divorce agreement will be negotiated. The government’s controversial Plan should go through in Parliament, he would be the basis for an orderly Brexit at the end of March 2019. Then would be followed by a Transition , in the United Kingdom for the time being in the customs Union will remain, until the final relations between the two sides have been resolved.

Central Bank chief Mark Carney and Finance Minister Philip Hammond, have always emphasized the importance of such a Transition. You would save the United Kingdom, a chaotic Brexit , is likely to put the economy on both sides of the English channel in front of great difficulties. Previously, the government of Prime Minister Theresa had warned May of the consequences of a disorderly Brexits.

brt/Reuters/dpa