The Bank of England on Wednesday warned a no-deal Brexit would trigger a financial crisis in Britain, causing the pound to plunge by 25 percent.
The central bank also said in a report that such a scenario could mean a gross domestic product shortfall of 8.0 percent in the first quarter of 2019.
The report said the unemployment rate would rise to 7.5 percent from the current level of 4.1 percent in this worst case scenario, while house prices would fall by 30 percent.
‘Our job is not to hope for the best but to prepare for the worst,’ Bank of England governor Mark Carney said at a press conference.
‘The proportion of businesses who have activated contingency plans remains a fraction of businesses as a whole,’ he said.
The worst case scenario is based on assumptions including disruption at British ports and a plunge in immigration.