BRITAIN is facing a new recession in the wake of the Brexit vote, experts have warned, after new data showed the economy had recorded a “dramatic deterioration,” slumping at its fastest rate since the 2008 financial crisis.
The warnings came as Philip Hammond, the new chancellor, signalled the UK Government’s tax and spending policy could be "reset" this autumn if the economy took a downturn following the EU referendum result.
And Sir Amyas Morse, head of the National Audit Office, the value-for-money watchdog, warned major infrastructure schemes such as Trident renewal, HS2, the restoration of the Palace of Westminster and a possible third runway at Heathrow all needed to be reassessed in light of the Brexit vote.
He said: “It's a tidal wave coming up the beach. It is an emergency. If we don't get it right, it will affect our economy and standards of life in this country.
Read more: Scotland 'on the brink of independence' says SNP's Westminster leader Angus Robertson
“To say we are going to carry on and do everything we did before; I just don't think that's going to be sustainable.”
In Scotland, the uncertainty created by the Brexit vote has been blamed for prominent construction firm Dunne Group entering administration earlier this week with the loss of over 500 jobs.
An insider at the Bathgate-based firm said its bank, Santander, had withdrawn the company's overdraft facilities without warning, leaving the group with a significant unplanned deficit.
The source suggested the bank's decision was a "knee-jerk" reaction to Brexit and an "example of a foreign bank having no confidence in the long-term future of British industry".
While Santander said it made the move because the firm was insolvent, the senior Dunne manager claimed the firm could be the first in a "long queue" of post-Brexit casualties.
Meantime a month after the EU vote, Angus Robertson, the SNP leader at Westminster, claimed Scotland was now “on the brink of independence,” in the strongest signal yet that the Nationalist leadership is considering triggering a second referendum on the nation’s future.
Read more: Scotland 'on the brink of independence' says SNP's Westminster leader Angus Robertson
In Cardiff, following an extraordinary meeting of the British-Irish Council to discuss Brexit, Nicola Sturgeon said the UK found itself in unprecedented times and would have to consider “unprecedented solutions”.
Downing Street has made clear the First Minister’s suggestion that Scotland could somehow remain in the EU while being part of the UK was “impracticable” as Brexit meant Brexit but Ms Sturgeon insisted the onus was now on Whitehall to show the rest of the UK that solutions could be found.
"If that doesn't happen," she insisted, "then for Scotland other options will have to be considered."
The sharp contraction recorded by Markit in its PMI was triggered by falling output and orders for the first time since the end of 2012 while business optimism in Britain's powerhouse services sector hit a seven-and-a-half-year low.
Chris Williamson, chief economist at the global information company, said the update showed a "dramatic deterioration" in the UK economy and that he expected GDP to contract by 0.4 per cent in the third quarter.
At Westminster, John McDonnell, the shadow chancellor, urged Mr Hammond to stop dithering, reverse the planned cuts to public investment and "bring forward shovel-ready projects across the country to help build an economy where no one is left behind".
Read more: Scotland 'on the brink of independence' says SNP's Westminster leader Angus Robertson
Baroness Kramer, the Liberal Democrat economic spokeswoman, called on those behind the Leave campaign to apologise to the country. "They claimed the economic impact would be negligible, yet one month on from the vote the PMI report shows we are on the edge of another 2008 crash.”
The Dunne Group was forecasting a net profit of around £7 million to this October with a bulging order book for the next two years, the insider said but a spokeswoman for Santander said: "Dunne Group had been making substantial losses and despite having provided increased facilities on numerous occasions to keep the business trading, the company was insolvent. Therefore, the management instructed the appointment of administrators earlier this week."
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