The Washington Post reports:

If Britain were to quit the E.U. without a formal withdrawal agreement — as Johnson has threatened — the biggest blows would fall on the United Kingdom and its European trading partners.

U.K. output would shrink by more than 5 percent while unemployment and inflation would soar, Mark Carney, the governor of the Bank of England, told Parliament earlier this week.

Broader effects on business and investor confidence would ripple through global financial markets. A further flight to safety by global investors could send the dollar even higher, which would make American goods more expensive for foreign buyers. That would depress U.S. exports, potentially increasing the trade deficit that the president insists he will narrow, economists said.

“Brexit is a multiyear looming catastrophe,” said Douglas Rediker, chairman of International Capital Strategies, a financial consultancy. “If you go over the cliff, the cost is more than just a quantitative cost in terms of trading impacts. It’s a reminder to financial markets that other bad things can happen.”

Despite the economic danger, the Trump administration continues to cheer on the long-running Brexit drama. At the White House on Wednesday, the president praised the embattled British prime minister shortly before his fourth parliamentary humiliation in little more than 24 hours. [Continue reading…]