Corbyn in No 10 'could plunge Britain into a recession' A Corbyn government would cost Britain billions more in interest payments and could plunge Britain into recession, economists have warned.
Analysts at Capital Economics said net debt would be 100billion higher under a Corbyn administration. Separate research has suggested the Labour programme would drive the cost of government borrowing, currently just above 1 per cent, soaring to above 3 per cent. The resulting increase in debt interest repayments at least 3billion is worth almost 1p on the basic rate of income tax or the salaries of tens of thousands of NHS staff. Labour says its programme would deliver a stimulus that would mean higher growth, higher tax revenues and ultimately lower debt. But Fathom said confidence in the UK could plummet: 'Markets punish tax and spend even if the government deficit is unchanged. They doubly punish deteriorating public finances. And they punish threefold those two plus inflation. Sterling and sterling denominated assets could fall a long way in this world. In the past, that has usually been enough to blow tax and spend governments irrevocably off course.' In the short term, analysts expect shares to plummet. The FTSE 100 closed at an all time high on Friday but Economists at consultancy Capital Economics said a Labour victory could send the market into reverse. 'Labour's intention to increase corporation tax to 26 per cent in 2020 from the current 19 per cent, for example, could be highly damaging for equities.' Labour shadow chancellor John McDonnell has said his party will only borrow to invest A Labour led coalition propped up by the SNP and leading to a second Scottish independence referendum would lead to 'a sharp fall' in Sterling, according to Fathom. Capital Economics said the financial markets are banking on a Tory victory and there could be wild moves in financial markets if that does not materialise. Labour shadow chancellor John McDonnell has said his party will only borrow to invest. A party spokesperson said: 'In the last few weeks, consultancy Oxford pandora internet radio nz Economics said growth would be higher under Labour than Tories and the pandora charms london Institute of Fiscal Studies also confirmed that Labour will close the current deficit with room to spare, and meet our rule of lower debt to GDP target by the end of the Parliament.' Most watched Money videos The new Nissan Qashqai will be in the showrooms from next month Instant karma!: Thief stopped by lorry driver quick thinking Jaguar Land Rover teases the opening of its classic car tour Investing Show: Are stockmarkets too expensive? Is this the best car used advert ever? Vitara gets CGI treatment Rolls Royce showcases its bespoke capabilities in stylish car Unsettling digital safety advert will make you think twice online The world largest luxury car Machine in Singapore Footage showing the amazing evolution of the Porsche 911 Carrera Should you worry about the election and your investments? How should investors deal with the UK election result? Investing Show: John Redwood on whether Trump can deliver Sainsbury's to buy convenience rival Nisa in 130m deal,. Daily Briefing: Possible deal as Scottish Widows in line. Jaguar Land Rover jobs drive for engineers who can create. MARKETS LIVE: FTSE up as David Davis begins Brexit talks. ALEX BRUMMER: Hammond must be heard 'failure to secure. Private equity giant Blackstone backs UK property by. Brexit vote fuelled 146bn betting frenzy in City amongst. Co op Bank in 'advanced talks' with investors over. Women's retailer Bonmarch suffers 40% profits fall as. Britain's holiday rental market booms as the weak pound. MIDAS SHARE TIPS UPDATE: Vital signs are improving at. A surprise surcharge AFTER you have paid it's the. Roaming may now be 'free' when you're abroad but you. 'Brexit is a lose lose proposition, harmful both to. Sainsbury's to buy convenience rival Nisa in 130m deal,. North South divide opens up in buy to let market as study. Why am I being offered a much more measly deal to move my. We're in crisis, say firms as EU workers shun UK: New. MOST pandora bracelet special offers READ MONEY PreviousDo you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will pandora bracelet beads link your MailOnline account with your Facebook account.
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