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Brexit may have already pushed UK into recession: Niesr

[LONDON] The UK's exit from the European Union may have already pushed the UK into a technical recession, according to the National Institute of Economic and Social Research (Niesr).

In a gloomy set of new forecasts, Niesr predicted that, even assuming a smooth exit in October, the nation will grow 1 per cent in 2019 and 1 per cent in 2020. There's an around a one-in-four chance that the economy is already shrinking, the think tank said.

The outlook worsens if there a no-deal Brexit, with Niesr seeing the possibility of a "severe" downturn in the event of a disorderly departure. Even if an "orderly" no deal exit is secured, Niesr says the economy will stagnate next year, with inflation accelerating to 4.1 per cent.

"However we look at it, there will not be much economic joy in a no-deal Brexit," said Niesr director Jagjit Chadha.

The pound fell after the report and traded at £1.2464 as of 10.08 am in London.