No agreement would brexit build a pound and cause a worse recession than the financial crisis, the Bank of England pointed out.
It is said that the UK economy could drop by 8% at a time when no transition period was reached, while house prices could drop by almost a third.
Bank of England also warned that the pound could drop by a quarter.
The Bank's analysis comes after the Finance Ministry said the UK would be worse than any form of Brexit.
The scenario of this bank is not what is expected, but it is the worst case scenario based on so-called "Intact Brexit".
The scenario deals with five years after the UK left the EU.
But by the end of 2023 the economy is expected to continue to grow.
- What did we learn from the Bank of England?
- Brexit will make the UK worse, warns the government
What is the "Bad Brexit"?
The Bank of England has made a number of assumptions – not prognoses – about what would cause an inappropriate Brexit.
- The United Kingdom will return to the rules of the World Trade Organization
- No new business deals were signed in 2022
- The UK will lose all access to existing trade agreements between the EU and third countries
- Severe border disruption due to customs controls
- Migration will change from 150,000 to 100,000
Bank of England is not likely to do so.
What is happening during this inappropriate scenario?
The scenarios drawn up by the Bank of England show that GDP will fall by 8% over the current forecast in 2019.
Growth would recover rapidly and the economy would re-expand until the end of 2023, but it should be smaller than where it was earlier.
Unemployment would rise to 7.5%, house prices drop by 30%, and commercial property prices dropped by 48%.
Interest rates would reach 4%
What other scenarios did the Bank of England consider?
The bank looked at the other three scenarios.
She also looked at the "disturbing" Brexit – the one in which the UK retained access to certain trade agreements.
It also looked at what might have happened if trade agreements were agreed to give the United Kingdom a "close" relationship or what it described as a "less tight" relationship.
Close links are those where there are no customs controls, no regulatory barriers and a partial agreement on financial services.
A less close relationship is that customs controls start after 2021 and further regulatory controls are in place.
What is happening in these scenarios?
If Brexit is more disturbing than disorderly, GDP will fall by 3% over the next five years by 2022, house prices will fall by 14% and unemployment will reach 5.75%
If a close trade relationship is to be concluded, the economy could still be 1% smaller than if the UK remained in the EU but 1.5% higher than the bank's last estimate.
If it is less close, growth in the economy could be 3.75% lower than if the United Kingdom remained in the EU and 0.75% than predicted in the latest inflation report.
These data cover the period up to 2023.
Why does the bank publish this data?
Brexit's contradictory and disparate scenarios are contained in the semi-annual review of financial stability.
Narrow and less complex scenarios are issued at the request of the Finance Committee of the Deputies on the impact of Brexit on the Bank's ability to perform its tasks in order to maintain financial stability and keep inflation at 2%.