If Britain crashes out of the EU without a deal its economy could end up being 9.3 per cent smaller in 15 years' time than would otherwise be the case, the government said on Wednesday.

A cross-departmental analysis found leaving the EU will leave Britain poorer than it would have been had it remained inside the bloc, even accounting for new trade deals it would eventually be able to sign.

It did not exactly model for the deal struck by <a href="http://www.wionews.com/world/uk-pm-theresa-may-opposition-leader-jeremy-corbyn-agree-to-tv-debate-over-brexit-179790">Prime Minister Theresa May </a>with the EU last week, the outlines of which remain vague, but suggests something similar could see the economy shrink by as much as 3.9 per cent.

The 83-page report was published a fortnight before British MPs vote on the deal, with many deeply opposed.

The Brexit deal comprises a divorce agreement and a political declaration on future ties, which offers a "spectrum" of options for how Britain will trade with the EU after Brexit, the report said.

Given this range of options, the economic analysis offered two different models on what the final deal could look like and assessed how they could affect the economy when combined with the government's hopes of ending free moment of EU workers into Britain.

If Britain got the frictionless trade it wants, as outlined in a government plan in July, and there was no change to migration arrangements, the economy would still shrink by 0.6 per cent compared to what it would be otherwise.

If Britain did get frictionless trade and net EEA migration fell to zero, the economy would shrink by 2.5 per cent.

But many believe Britain will not get everything it wants, and the analysis models a trade arrangement halfway between frictionless trade and a standard free trade agreement.

This compromise model with no change to migration would see the economy shrink by 2.1 per cent. With zero net migration, it would shrink by 3.9 per cent.

The document makes clear the paper is not an economic forecast for the UK economy, adding that the results "should be interpreted with caution".

The models also do not take into account changes such as demography or productivity levels, or any changes to EU rules in future.

They do however assume Britain rolls over the trade deals it currently benefits from as part of the EU and strikes new ones with countries including the United States.

But the impact of these trade deals is negligible -- and increase of between 0.1 and 0.2 per cent in GDP compared to today's arrangements.

If Britain crashes out of the EU without a deal its economy could end up being 9.3 per cent smaller in 15 years' time than would otherwise be the case, the government said on Wednesday.

If Britain crashes out of the EU without a deal its economy could end up being 9.3 per cent smaller in 15 years' time than would otherwise be the case, the government said on Wednesday. A cross-departmental analysis found leaving the EU will leave Britain poorer than it would have been had it remained inside the bloc, even accounting for new trade deals it would eventually be able to sign. It did not exactly model for the deal struck by Prime Minister Theresa May with the EU last week, the outlines of which remain vague, but suggests something similar could see the economy shrink by as much as 3.9 per cent. The 83-page report was published a fortnight before British MPs vote on the deal, with many deeply opposed. The Brexit deal comprises a divorce agreement and a political declaration on future ties, which offers a "spectrum" of options for how Britain will trade with the EU after Brexit, the report said. Given this range of options, the economic analysis offered two different models on what the final deal could look like and assessed how they could affect the economy when combined with the government's hopes of ending free moment of EU workers into Britain. If Britain got the frictionless trade it wants, as outlined in a government plan in July, and there was no change to migration arrangements, the economy would still shrink by 0.6 per cent compared to what it would be otherwise. If Britain did get frictionless trade and net EEA migration fell to zero, the economy would shrink by 2.5 per cent. But many believe Britain will not get everything it wants, and the analysis models a trade arrangement halfway between frictionless trade and a standard free trade agreement. This compromise model with no change to migration would see the economy shrink by 2.1 per cent. With zero net migration, it would shrink by 3.9 per cent. The document makes clear the paper is not an economic forecast for the UK economy, adding that the results "should be interpreted with caution". The models also do not take into account changes such as demography or productivity levels, or any changes to EU rules in future. They do however assume Britain rolls over the trade deals it currently benefits from as part of the EU and strikes new ones with countries including the United States. But the impact of these trade deals is negligible -- and increase of between 0.1 and 0.2 per cent in GDP compared to today's arrangements.

No-deal Brexit could cost UK economy 9.3% of GDP over 15 years: govt

Although Britain&#39;s economic growth is ticking along in the run-up to the general election, flat wages and the government&#39;s austerity programme continue to bite and cause anger among those left behind.

A world away from the glistening skyscrapers of London&#39;s City finance district, normal life for some resembles that depicted in last year&#39;s Cannes winner &quot;I, Daniel Blake&quot;.

The British film&#39;s protagonists, in the northeastern English city of Newcastle, battle with the impact of cuts to social services in place since 2010, struggling to make ends meet and relying on food banks.

Widening living standards is a hot topic in the looming general election due June 8, and one that analysts say played a crucial role in last year&#39;s shock referendum vote in favour of the country&#39;s exit from the European Union.

The Brexit verdict has been framed by some commentators as a reflection of the social divide between the haves and the have-nots in one of the world&#39;s richest economies.

Conservative Prime Minister Theresa May, who called the general election to strengthen her hand in the coming Brexit talks, claims she wants a society that works for everyone, albeit one that is not free of austerity nor social spending cuts.

Jeremy Corbyn, leader of the main opposition Labour Party and who has gained ground in recent opinion polls, argues that the yawning gap between rich and poor needs to be addressed.

While official statistics show that Britain&#39;s unemployment rate sits at a 42-year low of 4.6 per cent, many workers find themselves on low wages and short-term contracts.

Median household income stood at &pound;26,300 (30,100 euros, $33,700) in the year to March 2016, just four per cent above the pre-financial crisis value of ten years ago.

Statistics also show that income inequality in Britain has actually declined slightly since the 2008 crisis, reversing a sharp increase in previous decades, as higher-income households saw their earnings fall more in real terms.

However, the statistics mask the disproportionate effect of income stagnation on the lowest earners, with the Resolution Foundation, a think-tank, warning that inequality in living standards could reach levels not seen for 30 years.

Meanwhile the Equality Trust states that in 2017, the country&#39;s 1,000 richest people will together own more wealth than that held by 40 per cent of the poorest households combined.

Small-jobs economy

&quot;Record numbers of people visited food banks last year, millions are locked out of a decent home, and two-thirds of children in poverty are in working households,&quot; Equality Trust&#39;s executive director Wanda Wyporska said this month.

According to the Office for National Statistics, 6.5 per cent of the British population, or 3.9 million people, was living in poverty in 2014, the most recent year for which data are available.

To survive, many Britons, especially the youngest, have to take on more than one low-paid and often low-skilled job at a time, scrambling in what is often called the &quot;gig economy&quot;.

At the same time, the number of so-called &quot;zero hour&quot; contracts is breaking records at 900,000 jobs. Such positions guarantee neither a number of hours to be worked nor a fixed rate of pay.

As a direct consequence, the TUC union calculates that over the last seven years, UK wages have not kept pace with inflation -- the longest period of time since the 1870s.

&quot;British workers have endured the longest pay squeeze since Victorian times,&quot; said TUC General Secretary Frances O&#39;Grady. &quot;And now even more pain is on the horizon.&quot;

Ahead of the election, May has vowed to improve workers&#39; rights, cap energy prices, lift minimum earnings and raise the threshold at which income tax is paid.

But she has been forced to reverse a manifesto commitment on capping social care costs following heavy public criticism and opposition from within her Conservative Party.

Corbyn, meanwhile, has pledged to hike taxes on the well-off, renationalise key industries like railways, scrap university tuition fees and pump cash into the state-run National Health Service.

His critics say Labour has not properly assessed the cost of those proposals.

(AFP)

Widening living standards is a hot topic in the general election due to be held on June 8

Although Britain's economic growth is ticking along in the run-up to the general election, flat wages and the government's austerity programme continue to bite and cause anger among those left behind. A world away from the glistening skyscrapers of London's City finance district, normal life for some resembles that depicted in last year's Cannes winner "I, Daniel Blake". The British film's protagonists, in the northeastern English city of Newcastle, battle with the impact of cuts to social services in place since 2010, struggling to make ends meet and relying on food banks. Widening living standards is a hot topic in the looming general election due June 8, and one that analysts say played a crucial role in last year's shock referendum vote in favour of the country's exit from the European Union. The Brexit verdict has been framed by some commentators as a reflection of the social divide between the haves and the have-nots in one of the world's richest economies. Conservative Prime Minister Theresa May, who called the general election to strengthen her hand in the coming Brexit talks, claims she wants a society that works for everyone, albeit one that is not free of austerity nor social spending cuts. Jeremy Corbyn, leader of the main opposition Labour Party and who has gained ground in recent opinion polls, argues that the yawning gap between rich and poor needs to be addressed. While official statistics show that Britain's unemployment rate sits at a 42-year low of 4.6 per cent, many workers find themselves on low wages and short-term contracts. Median household income stood at £26,300 (30,100 euros, $33,700) in the year to March 2016, just four per cent above the pre-financial crisis value of ten years ago. Statistics also show that income inequality in Britain has actually declined slightly since the 2008 crisis, reversing a sharp increase in previous decades, as higher-income households saw their earnings fall more in real terms. However, the statistics mask the disproportionate effect of income stagnation on the lowest earners, with the Resolution Foundation, a think-tank, warning that inequality in living standards could reach levels not seen for 30 years. Meanwhile the Equality Trust states that in 2017, the country's 1,000 richest people will together own more wealth than that held by 40 per cent of the poorest households combined. Small-jobs economy "Record numbers of people visited food banks last year, millions are locked out of a decent home, and two-thirds of children in poverty are in working households," Equality Trust's executive director Wanda Wyporska said this month. According to the Office for National Statistics, 6.5 per cent of the British population, or 3.9 million people, was living in poverty in 2014, the most recent year for which data are available. To survive, many Britons, especially the youngest, have to take on more than one low-paid and often low-skilled job at a time, scrambling in what is often called the "gig economy". At the same time, the number of so-called "zero hour" contracts is breaking records at 900,000 jobs. Such positions guarantee neither a number of hours to be worked nor a fixed rate of pay. As a direct consequence, the TUC union calculates that over the last seven years, UK wages have not kept pace with inflation -- the longest period of time since the 1870s. "British workers have endured the longest pay squeeze since Victorian times," said TUC General Secretary Frances O'Grady. "And now even more pain is on the horizon." Ahead of the election, May has vowed to improve workers' rights, cap energy prices, lift minimum earnings and raise the threshold at which income tax is paid. But she has been forced to reverse a manifesto commitment on capping social care costs following heavy public criticism and opposition from within her Conservative Party. Corbyn, meanwhile, has pledged to hike taxes on the well-off, renationalise key industries like railways, scrap university tuition fees and pump cash into the state-run National Health Service. His critics say Labour has not properly assessed the cost of those proposals. (AFP)

Gulf in living standards at heart of UK election battle

British Prime Minister Theresa May warned of possible &quot;difficult times ahead&quot; for Britain&#39;s economy as she arrived at the G20 summit of world leaders in China on Saturday.&nbsp; 
 
She said there may be difficult times ahead, but also voiced her optimism about Britain&rsquo;s health. 
 
&quot;I&#39;m not going to pretend that it&#39;s all going to be plain sailing,&quot; she said. &quot;I think we must be prepared for the fact that there may be some difficult times ahead. But what I am is optimistic.&quot; 
 
May also confirmed Downing Street briefings that she is not intending to call a general election soon. 
 
&quot;I&#39;m not going to be calling a snap election,&quot; May said.&nbsp; 
 
She added, &quot;I&#39;ve been very clear that I think we need that period of time, that stability, to be able to deal with the issues that the country is facing and have that election in 2020.&quot; 
 
May is meeting world leaders including US President Barack Obama and China&#39;s Xi Jinping at the G20 summit in China. 
 
She had been hoping to pitch the UK as a global leader in free trade during her first major outing on the world stage at the G20 summit. 
 
But, she was faced with a difficult start.&nbsp; 
 
President Barack Obama said the UK would not be the priority for a US trade deal and Japan issued an unprecedented 15-page warning about the consequences of Brexit. 
 
(WION with inputs from agencies)

May said, 'I think we must be prepared for the fact that there may be some difficult times ahead. But what I am is optimistic'

British Prime Minister Theresa May warned of possible "difficult times ahead" for Britain's economy as she arrived at the G20 summit of world leaders in China on Saturday. She said there may be difficult times ahead, but also voiced her optimism about Britain’s health. "I'm not going to pretend that it's all going to be plain sailing," she said. "I think we must be prepared for the fact that there may be some difficult times ahead. But what I am is optimistic." May also confirmed Downing Street briefings that she is not intending to call a general election soon. "I'm not going to be calling a snap election," May said. She added, "I've been very clear that I think we need that period of time, that stability, to be able to deal with the issues that the country is facing and have that election in 2020." May is meeting world leaders including US President Barack Obama and China's Xi Jinping at the G20 summit in China. She had been hoping to pitch the UK as a global leader in free trade during her first major outing on the world stage at the G20 summit. But, she was faced with a difficult start. President Barack Obama said the UK would not be the priority for a US trade deal and Japan issued an unprecedented 15-page warning about the consequences of Brexit. (WION with inputs from agencies)

May warns of 'difficult times' for UK economy

Royal Bank of Scotland reported wider first-half losses, 1.3 billion Pounds of new litigation charges and axed plans to turn its Williams &amp; Glyn business into a stand-alone bank today as it braces for post-Brexit shocks to the UK economy. 
 
RBS, which has not made an annual profit since 2007, booked 2.05 billion Pounds ($2.69 billion) of losses for the first half of 2016, against a 179 million Pound loss a year ago. 
 
Chief Executive Ross McEwan is battling to complete a restructuring of the taxpayer-backed bank, which includes asset sales, job cuts and multi-billion dollar charges to settle litigation and pay regulatory fines for past misconduct. 
 
Those issues have complicated RBS&#39;s task of finding profitable business in a low interest rate economy with feeble credit demand, which now faces pressures from Britain&#39;s vote to leave the European Union and a possible new referendum on Scottish independence. 
 
&quot;There is more work to be done but we are making progress,&quot; McEwan said, adding that RBS is preparing to detail a new cost-cutting plan at its full-year results in early 2017 that will involve an unspecified number of job cuts and branch closures. 
 
The CEO said RBS had not yet decided whether to pass on the Bank of England&#39;s 25 basis point base rate cut to standard variable rate borrowers, a key part of the central bank&#39;s plans unveiled on Thursday to cushion the economy against Brexit. 
 
McEwan said RBS would look at the BoE&#39;s new Term Funding Scheme aimed at helping banks to boost lending to households and businesses. 
 
RBS shares, which have fallen almost 40 per cent so far this year, were 6.8 per cent lower by 1250 GMT.&nbsp;RBS said it no longer planned to build an independent technology platform for its Williams &amp; Glyn business, citing complexity and the lower interest rate environment. 
 
The bank had originally wanted to turn the small business lender into a &#39;bank within a bank&#39; so it could achieve a clean break when the business was sold under the terms of its 45.5 billion-Pound state bailout in the global financial crisis. 
 
But RBS said the risks and costs inherent in its plan were no longer &quot;prudent&quot; and it would look at other ways to achieve the carve out, which has already cost it 1.5 billion Pounds. 
 
Spain&#39;s Banco Santander has made a formal offer to take over Royal Bank of Scotland&#39;s Williams &amp; Glyn business, two sources familiar with the matter said earlier this week. 
 
Restructuring 
 
Edinburgh-based RBS&#39;s total income fell by almost a fifth to 6.06 billion Pounds in the first half, while the bigger losses were partly driven by a 630 million Pound charge for corporate restructuring, some 345 million Pounds of which related to Williams &amp; Glyn. 
 
&quot;These results show how much work RBS still has on its plate, progress has been made, but it has been slow,&quot; Laith Khalaf, a senior analyst at Hargreaves Lansdown told Reuters. 
 
&quot;If you went back to the financial crisis very few people would have predicted that it would have taken so long to heal the wounds. Whilst RBS is relatively well capitalised, the issue is profitability rather than solvency,&quot; he said. 
 
Impairments rose by more than a quarter to 409 million Pounds and the bank warned a target to reduce its cost to income ratio below 55 per cent by 2019 would be &quot;more challenging&quot;. 
 
RBS said restructuring costs were expected to remain high in 2016, totalling more than 1 billion Pounds. 
 
The bank also set aside an additional 450 million Pounds to compensate customers mis-sold payment protection insurance and made a 180 million Euros ($201 million) provision for redress in its Irish tracker mortgages business. 
 
These came on top of 707 million Pounds of new litigation charges, which analysts at Bernstein said were largely down to a long-running dispute with investors over its 2008 rights issue.&nbsp;Despite the provision, McEwan said RBS had yet to make any deal with claimants, and he still expected the matter to go to court in 2017. 
 
Meanwhile, the bank continues to wait for what analysts broadly expect to be the biggest regulatory penalty in its history for its role in mis-selling US mortgage bonds in the run up to the financial crisis. 
 
(Reuters)

RBS, which has not made an annual profit since 2007, booked 2.05 billion Pounds ($2.69 billion) of losses for the first half of 2016

Royal Bank of Scotland reported wider first-half losses, 1.3 billion Pounds of new litigation charges and axed plans to turn its Williams & Glyn business into a stand-alone bank today as it braces for post-Brexit shocks to the UK economy. RBS, which has not made an annual profit since 2007, booked 2.05 billion Pounds ($2.69 billion) of losses for the first half of 2016, against a 179 million Pound loss a year ago. Chief Executive Ross McEwan is battling to complete a restructuring of the taxpayer-backed bank, which includes asset sales, job cuts and multi-billion dollar charges to settle litigation and pay regulatory fines for past misconduct. Those issues have complicated RBS's task of finding profitable business in a low interest rate economy with feeble credit demand, which now faces pressures from Britain's vote to leave the European Union and a possible new referendum on Scottish independence. "There is more work to be done but we are making progress," McEwan said, adding that RBS is preparing to detail a new cost-cutting plan at its full-year results in early 2017 that will involve an unspecified number of job cuts and branch closures. The CEO said RBS had not yet decided whether to pass on the Bank of England's 25 basis point base rate cut to standard variable rate borrowers, a key part of the central bank's plans unveiled on Thursday to cushion the economy against Brexit. McEwan said RBS would look at the BoE's new Term Funding Scheme aimed at helping banks to boost lending to households and businesses. RBS shares, which have fallen almost 40 per cent so far this year, were 6.8 per cent lower by 1250 GMT. RBS said it no longer planned to build an independent technology platform for its Williams & Glyn business, citing complexity and the lower interest rate environment. The bank had originally wanted to turn the small business lender into a 'bank within a bank' so it could achieve a clean break when the business was sold under the terms of its 45.5 billion-Pound state bailout in the global financial crisis. But RBS said the risks and costs inherent in its plan were no longer "prudent" and it would look at other ways to achieve the carve out, which has already cost it 1.5 billion Pounds. Spain's Banco Santander has made a formal offer to take over Royal Bank of Scotland's Williams & Glyn business, two sources familiar with the matter said earlier this week. Restructuring Edinburgh-based RBS's total income fell by almost a fifth to 6.06 billion Pounds in the first half, while the bigger losses were partly driven by a 630 million Pound charge for corporate restructuring, some 345 million Pounds of which related to Williams & Glyn. "These results show how much work RBS still has on its plate, progress has been made, but it has been slow," Laith Khalaf, a senior analyst at Hargreaves Lansdown told Reuters. "If you went back to the financial crisis very few people would have predicted that it would have taken so long to heal the wounds. Whilst RBS is relatively well capitalised, the issue is profitability rather than solvency," he said. Impairments rose by more than a quarter to 409 million Pounds and the bank warned a target to reduce its cost to income ratio below 55 per cent by 2019 would be "more challenging". RBS said restructuring costs were expected to remain high in 2016, totalling more than 1 billion Pounds. The bank also set aside an additional 450 million Pounds to compensate customers mis-sold payment protection insurance and made a 180 million Euros ($201 million) provision for redress in its Irish tracker mortgages business. These came on top of 707 million Pounds of new litigation charges, which analysts at Bernstein said were largely down to a long-running dispute with investors over its 2008 rights issue. Despite the provision, McEwan said RBS had yet to make any deal with claimants, and he still expected the matter to go to court in 2017. Meanwhile, the bank continues to wait for what analysts broadly expect to be the biggest regulatory penalty in its history for its role in mis-selling US mortgage bonds in the run up to the financial crisis. (Reuters)

Royal Banks of Scotland losses and costs mount as Brexit fallout looms large

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No-deal Brexit could cost UK economy 9.3% of GDP over 15 years: govt

Gulf in living standards at heart of UK election battle

May warns of 'difficult times' for UK economy

Royal Banks of Scotland losses and costs mount as Brexit fallout looms large