UK's fiscal watchdog to warn of recession in 2020 in case of 'no-deal' Brexit - The Times

(Reuters) - Britain's fiscal watchdog is expected to say on Thursday that Britain's economy will fall into a recession next year and that its economy will be 3% smaller in the event of a "no-deal" Brexit, The Times newspaper reported.

The Office for Budget Responsibility's (OBR) five-year forecast predicts that growth will contract in 2020 as the UK economy officially enters into a recession, the newspaper said on Wednesday.

The OBR on Thursday will lay out and analyse risks to the medium-term outlook for Britain's public finances, and has said it will model a fiscal "stress test" on the economy.

It has said that it will use the International Monetary Fund's modelling of a no-deal Brexit in its analysis.

In April, the IMF warned that Britain would suffer economic damage equivalent to the loss of at least 2-3 years of normal growth between now and the end of 2021 if it leaves the European Union without an exit deal.

The IMF said that even in a relatively orderly no-deal Brexit scenario -- with no delays at borders and minimal financial market turmoil -- the economy would grow 3.5% less by the end of 2021 than it would under a smoother Brexit.

(Reporting by Philip George in Bengaluru and Alistair Smout in London, additional reporting by David Milliken in London; editing by Diane Craft)