Thursday 21 July 2016 9:44 am

Ken Clarke says there is a good chance of recession before end of this year

Tory grandee Ken Clarke has said that the UK could very well be headed for a recession given the current economic instability resulting from the Brexit vote.

The former chancellor said there could be a recession before the end of the year.

Speaking to LBC, Clarke said: "I think there's a very good risk of recession before the end of the year. I hope I'm wrong. The IMF doesn't appear to think we're going to go into recession, they think we're going to suffer a bad slowdown which I think is pretty inescapable.

Read more: Ken Clarke reflects on a life spent pondering Europe with City A.M.

"Certainly in the short term we face a lot of economic difficulties.

"The vote has plainly done a great deal of damage to confidence in the economy. No-one's going to invest here until we have a kind of outline of what our economic and trading relationships are going to be with the rest of the world. And its caused quite a shock to the global economy.

"I hope all that's not too gloomy and is wrong, but we've got to get on with deciding what Brexit means … It's all very well saying Brexit means Brexit."

Read more: Clarke to stand down at the next general election

Clarke also said the reason that the triggering of Article 50 was being put off because noone agrees on what exactly what the UK wants to ask for and what it wants to negotiate.

He added he would opt for the Norwegian option and join the European Economic Area, thereby having access to the Single Market. The UK would have no vote over EU rules, and would be obliged to implement all EU laws relating to the internal market.