The OECD has predicted that Theresa May will fail to secure a comprehensive free trade agreement with the rest of the EU by 2019, meaning the UK would revert to WTO trading terms.
According to Treasury estimates, which the government has still not repudiated, reverting to WTO rules would mean a long-term loss of £45bn a year to the public purse and a 7.5% hit to GDP.
The OECD is also predicted a sharp slowdown in UK growth to just 1% in 2018 due to uncertainty over the Brexit negotiations.
Liberal Democrat Shadow Chancellor Vince Cable said:
“Voters should listen to this eve of poll warning on the major economic risk posed by Theresa May’s extreme, UKIP-style Brexit.
“The hardline approach Theresa May has taken, insisting that no deal is better than a bad deal and planning to take us out of the single market, will seriously damage jobs and the public finances for years to come.
“According to the government’s own forecast, reverting to WTO terms would mean a £45bn loss to the public purse, more money than the entire schools budget.
“There is another way. The Liberal Democrats will fight to keep Britain in the single market and customs union, and to ensure the people have the final say on the Brexit deal.”