The Organization for Economic Cooperation and Development (OECD) has announced negative expectations of growth in the British economy under the elevating risks of the rise of Coronavirus, along with the damages caused by exiting of the European Union without a trade agreement.
The OECD said the British economy may suffer from a contraction of in more than 10% during 2020, while it may not recover before 2021.
The organization's expectations for Britain were more pessimistic than the BOE’s estimates, where the OECD believes that Britain's departure from the European Union may pose more risk.
Meanwhile, there are talks between the United Kingdom and the European Union, with just one day left on the deadline imposed by Boris Johnson to finalize a deal.
The OECD warned that failure to reach an agreement would have a great negative impact on trade and jobs, with export-based sectors such as the automobile, transport, meat and textile industry to be more affected. Financial services will also be significantly damaged with the separation from the European Union.
In its forecast, the organization believes that Britain's exit from the European Union without a trade agreement would cost the economy to contract 5 percent after two years, leading to increased government borrowing and debt.
The pound has risen against the U.S. dollar to record its highest level in a week at 1.2988, noting that the pair opened today at 1.2929.