No Deal Brexit could cause almost as much damage as 2008 financial crash, Jeremy Hunt has claimed

JEREMY Hunt yesterday warned a No Deal Brexit could cause almost as much damage to the economy as the 2008 credit crisis.

Just a day after saying he was ready to trigger a cliff-edge exit, the Tory leadership contender said the fallout from one might be “very serious if we get this wrong”.

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Earlier, Chancellor Philip Hammond threw a grenade into the contest by signalling he would almost certainly vote with Labour to block a No Deal.

And he told the Commons it would blow a £90billion hole in the public finances — over three times the £26billion “buffer” built up so far to protect the economy.

In comments that were seized upon by Labour, Mr Hammond said: “It would be wrong for a British Government to seek to purse a No Deal as a policy.

“And I believe that it will be for the House of Commons - of which I will continue proudly to be a member - to ensure that doesn’t happen.”

He added: “We have built up £26 billion of headroom to protect the United Kingdom from the effects of a possible No Deal.

“But I have no doubt we will need all of that money and more to respond to the immediate impacts to the disruption of a No Deal exit, and that there will no money available for longer term tax cuts or spending increases.

“But let me go further. The government’s analysis suggest in a disruptive No Deal exit three will be a hit to the Exchequer of £90 billion. That will also have to be factored in to future spending and tax decisions

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He said: “It is important we all understand that preparing for a No Deal is not the same as avoiding the effects of a No Deal.”

Shadow Chancellor John McDonnell welcomed his opponent’s criticism — and said it had been Labour’s hope to “draw him out” in exchanges yesterday.

He said it was clear the Chancellor represented a “solid bloc” of Tory MPs who would block a No Deal.

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