Chancellor Philip Hammond warns of no deal 'economic shock'

Some would argue that Brexit feels like it’s being organised in a brewery.

On Friday morning, the Chancellor visited one of Britain’s oldest breweries - Fuller’s - not to drown his sorrows, but to toast a modest success.

The economy grew by 0.6% between July and September - the strongest growth in two years.

Exports and household spending were strong.

A combination of England’s unexpected success at the World Cup and the wonderful summer sunshine boosted retail spending.

The Chancellor claims the performance demonstrates the “fundamental strength” of the economy, but the solar-powered economic surge was short-lived: momentum fell away after July.

Gross domestic product ((GDP) the market value of all the final goods and services produced in a certain period) didn’t grow at all in August and September.

What happens next depends on the outcome of the negotiations that will determine our future trading relationships with the European Union.

Philip Hammond believes the stakes couldn’t be higher.

Philip Hammond believes the stakes couldn’t be higher. Credit: ITV News

“Leaving the EU with no deal would be taking a huge risk with the economy,” the Chancellor told ITV News.

“No deal would be a shock to the economy.

"We’ve seen shocks to the economy before.

"Many people who are old enough will remember the oil price shock [in the 1970s] and the financial crisis.

"[No Deal] will mean some industries are no longer viable, others will grow.”

Consumers seem relaxed about Brexit but businesses aren’t.

Investment by companies fell between July and September for the third quarter in a row.

The last time that happened, nine years ago, Britain was in recession.

The Government is hoping for a settlement which retains the closest possible trade ties with the EU while ending the right of EU citizens to come and go to Britain as they please.

The Chief Executive of Fuller’s, Simon Emeny, says around 40% of his 5,000 staff are non-British, EU citizens, and that job applications have fallen by half since the referendum.

The company has funded permanent residency for 250 staff.

“We’ve got long memories here," Mr Emeny said.

"We’ve traded successfully through recession before, traded through downturns, the thing that’s causing us some sleepless nights revolves around people."

The Chancellor says he’s confident we’ll have the details of an agreement “very soon”.

However, there’s no sign of one yet and there are plenty of signs that the economy is slowing.