RBS warns no-deal Brexit could spark UK recession

London: A no-deal Brexit risks sending the British economy into recession in 2019, the head of the Royal Bank of Scotland warned on Thursday.
The lender’s consensus economic forecast for “next year says about 1.0-1.5 growth in the economy if we get an okay Brexit scenario,” chief executive Ross McEwan told the BBC.
“But if we get a very hard Brexit scenario … it actually will be less than that. “And the economy may well go down to zero or negative growth next year if that Brexit relationship is very very harsh.” This would hurt the bank’s profitability and share price, he cautioned. The technical definition of a recession is two successive quarters of negative economic growth.
“If we don’t get the (economic) growth, that reflects into … the growth of our business which may be zero or negative,” the boss added.
The Edinburgh-based bank remains 62.4-per cent owned by the government after it received a vast bailout during the global financial crisis.
In the face of Brexit uncertainty, RBS lending was becoming more cautious, according to McEwan.
“We are seeing the very large corporates just pausing in their investment into the UK because they are sitting saying: Do we wait for another six months to see what the outcome is? And that is what they are doing.— AFP