KPMG predicts no-deal Brexit recession in 2020

Accountancy giant forecasts GDP to shrink by 1.5% with business confidence badly dented

Britain will plunge into its first recession in a decade should the government quit the European Union without a deal, according to the latest in a string of gloomy forecasts about the UK's fortunes outside the EU's free trade area.

Economists at the accountancy firm KPMG said that the knock-on effects to Britain's trade and business confidence of a no-deal Brexit would lead to the economy shrinking by 1.5% next year.

Related: Consumer spending at weakest since mid-90s amid Brexit chaos - BRC

At 11pm UK time on 31 October the UK would, by default, become a "third country" in terms of relations with the EU, with no overarching post-Brexit plan in place and no transition period. The UK would no longer be paying into the EU budget, nor would it hand over the 39bn divorce payment.