RBS: No-deal Brexit could send UK economy reeling
Royal Bank of Scotland (RBS) boss Ross McEwan has warned that a no-deal Brexit could push the UK into another recession.
Economic growth could fall flat or even turn negative if the UK leaves the EU without a deal, he told the BBC.
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His bank, which remains majority-owned by the taxpayer after the government bailed it out a decade ago, is planning to restrict lending to the retail and construction industries, with both featuring plenty of struggling companies.
Around 2,000 stores have closed on the high street so far this year, while growth in the construction sector sagged to a six-month low this week.
"We are assuming 1-1.5% growth for next year but if we get a bad Brexit then that could be zero or negative and that would affect our profitability and our share price,” McEwan told the BBC.
"There are some retailers we are having to be a bit more cautious about because they haven't made the necessary transition from bricks and mortar to digital,” he added.
Meanwhile, he warned construction giants are becoming “very cautious” about London’s market in particular.
He also said larger firms across industries are waiting to see what happens with Brexit, with lending to bigger companies down two per cent for the bank.
"Big businesses are pausing, they are saying that in six months time I'll have another look at the UK and I might come back, but if it's really bad I'll invest elsewhere – that's the reality of where we are today."
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The government has said it is chasing a Chequers-style agreement with the EU, hoping for a deal in October or November, but Prime Minister Theresa May’s plan has come under attack from a number of sides.
Fellow Conservatives have touted a Canada-style free trade alternative, while Labour has refused to back an agreement if May brings one back to parliament.