LONDON — Leaving the European Union without a divorce deal could plunge Britain into its deepest recession in nearly a century, with the economy shrinking 8 percent within months as unemployment and inflation soar, the Bank of England warned Wednesday.
The stark projection came the same day the government’s own economists said the country will be poorer after Brexit than if it had stayed in the EU, no matter what sort of trade deal it secures.
Britain and the EU have agreed on a deal for the U.K.’s smooth exit in March. But British lawmakers are threatening to derail it, and Prime Minister Theresa May is battling to persuade them to support her agreement when Parliament votes next month.
May says that if Parliament rejects her deal, Britain could be headed for an economically disruptive Brexit on March 29.
The central bank said that in a worst-case scenario that could mean Britain’s economy slumps far more than it did after the 2008 global crisis.
It predicted that in a no-deal scenario, inflation would rise to almost 7 percent, unemployment would soar to 7.5 percent, the pound would fall to near parity with the dollar and house prices would fall 30 percent.
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