RBS boss says no-deal Brexit could spark recession

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The chief executive of the partly taxpayer-owned Royal Bank of Scotland has said a no-deal Brexit could lead to recession.

Ross McEwan, appointed CEO in October 2013, told the BBC any dip in growth would affect the bank’s profits and share price.

Royal Bank of Scotland boss Ross McEwan. Picture: TSPL

Royal Bank of Scotland boss Ross McEwan. Picture: TSPL

UK Government Investments holds a 62.4% of RBS shares after the 2008 bailout and subsequent disposals.

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Mr McEwan told the broadcaster: “We are assuming 1-1.5% growth for next year but if we get a bad Brexit then that could be zero or negative and that would affect our profitability and our share price.”

He added that the bank was becoming more cautious with its lending - and large companies were delaying investment decisions.

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He said: “Big businesses are pausing, they are saying that in six months time I’ll have another look at the UK and I might come back, but if it’s really bad I’ll invest elsewhere - that’s the reality of where we are today.”

Last month, the potential consequences of a no-deal Brexit were spelled out by Bank of England governor Mark Carney at a special meeting of the Cabinet when he warned ministers of a 35% crash in house prices over three years in a worst-case scenario.

Speaking in Dublin after the meeting, Mr Carney said the Bank had used its “stress test” to ensure UK banks could continue to function in the event of a “disorderly” Brexit.

“The Bank of England is well prepared for whatever path the economy takes, including a wide range of potential Brexit outcomes,” he said.