According to the Institute for Fiscal Studies (IFS), a no-deal Brexit could increase Britain’s budget deficit to nearly 100 billion pounds, growing by more than double. The IFS estimates that Britain’s borrowing could clime to around 4% of its national income to touch 92 billion pounds in case Britain leaves the EU without a deal.

The British economy is also set to enter a recession next year, which could set the government back by around 23 billion pounds of additional spending via stimulus efforts. In addition, austerity measures would be undertaken by the government in the aftermath of a no-deal Brexit, causing annual borrowing to exceed 100 billion pounds.

As a result of a hard Brexit, the British government would have lesser money to spend on public services and be forced to increase taxation. IFS predicts that Britain would have to consider increase taxation to compensate for rising pension costs as the population of seniors climbs higher.