A Eurozone break-up would plunge the UK into an even deeper recession than the last one, force the Government to nationalise the banks, and trigger a £1 trillion bout of money printing, leading economic consultancy Fathom has warned.
by Philip Aldrick
The economy would shrink by 5.2pc in 2013 if the euro collapsed, according to Fathom Consulting – a projection that former Bank of England deputy governor Sir John Gieve described as “modest”. In 2009, the worst year of the recent recession, the economy shrank by just 4pc.
Sir John added that the Government will have prepared contingency plans “to nationalise the banking system, for example” and warned that a euro collapse would leave Britain vulnerable to an attack from the markets. Speaking about the UK at Fathom’s quarterly Monetary Policy Forum, he asked rhetorically: “If you [traders] think Europe’s going down the plughole, who’s next?”