PHILIP Hammond ignited fresh anger from Eurosceptic Tories last night after giving his backing to a report warning that a no-deal Brexit could plunge Britain into recession.
The Chancellor joined International Monetary Fund chief Christine Lagarde yesterday at the launch of a report raising alarm about possible “substantial costs” for the UK economy in the event of the country quitting the EU without a trade agreement.
He also suggested a breakdown in the Brussels talks could reverse the “progress” made by the British economy in recovering from the financial crisis a decade ago.
But Brexit supporters were dismayed to see the Chancellor closely aligning himself with the IMF following the organisation’s recession warnings during the EU referendum campaign.
Senior Tory MP Jacob Rees-Mogg, chairman of the European Research Group of MPs, said: “The Chancellor continues to do his best to obstruct Brexit and has been consistently wrong.
Stewart Jackson, a former chief-of-staff at the Department for Exiting the EU urged Theresa May to sack the Chancellor for his latest doom-mongering outburst.
“Not that 10 Downing Street would take my advice, but surely it is high time to give Brexit atmosphere hoover Philip Hammond the chop,” he said.
And Tory backbencher Nadine Dorries added: “Uh oh, she’s back – Christine Legarde, the prophet of doom.”
night At a news conference at the Treasury, Mr Hammond said the IMF’s annual assessment of the outlook for the UK economy showed the importance of securing a Brexit deal.
“We are at a critical juncture for the UK economy. We must lock in the economic progress that we have made,” he said.
“As we leave the EU we must secure a close and enduring partnership with our European neighbours and we must heed the clear warnings of the IMF and others of the significant costs not reaching a deal with the EU will have for British jobs and British prosperity.
“Despite the contingency actions we are taking, leaving without a deal would put at risk the substantial progress the British people have made over the last 10 years.”
He added: “As talks intensify, I am confident we will reach agreement on the withdrawal agreement and the future framework this autumn, but we must of course continue to prepare for all scenarios.
“A no-deal scenario remains unlikely but it is not impossible.”
Ms Lagarde said a no-deal Brexit would lead to “dire consequences”, adding: “It would inevitably have consequences in terms of reduced growth, an increase in the deficit and a depreciation of the currency.
“In relatively short order it would mean a reduction in the size of the economy.”
The remarks from the Chancellor and the IMF managing director followed a report from the Economists for Free Trade pressure group, backed by Mr Rees-Mogg and other Eurosceptic Tories, arguing that Britain had nothing to fear from a “no-deal” Brexit.
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