ECONOMISTS believe the chances of a no-deal Brexit are at their highest since October 2017, as Boris Johnson leads Jeremy Hunt in the Tory leadership race.

In the latest poll by Reuters this week, the results of which were published yesterday, economists put the median probability of a no-deal departure from the European Union by the UK at 30 per cent. This is up from 25% last month and 15% in May.

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Mr Johnson is hotly tipped to defeat Mr Hunt in the final round of the Conservative leadership race, and be announced as the next prime minister on Tuesday.

In a campaign video released last month, former foreign secretary Mr Johnson told a member of the public: “If I get in we’ll come out, deal or no deal, on October the 31st.” He has continued to hammer home his determination for the UK to leave the EU by Hallowe’en whether or not there is a deal.

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Mr Johnson and Mr Hunt both fuelled fears of a no-deal Brexit in a leadership debate on Monday night by opposing the Irish backstop negotiated with the EU.

Sterling has been weighed down this week by no-deal Brexit fears, tumbling below $1.24 for the first time since April 2017. It found some support on Thursday from a key vote by MPs aimed at making it more difficult for a future prime minister to force through a no-deal Brexit.

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Economists polled this week put the median probability of UK recession in the coming year at 30%, up from 25% in June. They put the median probability of recession in the next two years at 35%, up from 30% last month .