THE grim tidings for the UK economy continue to come thick and fast as Prime Minister Boris Johnson and cabinet colleagues stoke fears of a no-deal Brexit.

Sterling sunk to a 28-month low against the dollar at the start of the week after weekend comments from Michael Gove, minister responsible for no-deal preparations, said the government “must work on the assumption” the UK leaves the European Union (EU) without a deal. That was followed by grim forecasts by the Bank of England, which said on Thursday that there was already a one-in-three chance of a recession because of “Brexit uncertainties” - and worse to come if there is a no-deal outcome.

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Against that backdrop, it was no surprise to hear Royal Bank of Scotland warn yesterday that Brexit uncertainty is contributing to an extremely challenging backdrop for the institution.

While first-half profits rose, boosted by an exceptional gain on the disposal of its stake in Saudi bank Alawwal, the bank said it was now “very unlikely” that it would meet key financial targets in 2020 because of the protracted economic and political upheaval.

And it repeated that the uncertainty was continuing to cause large businesses to put investment decisions on hold, with corporates reluctant to borrow money to fund expansion while clarity on the shape of future trading arrangements between the UK and the EU remains elusive.

The sense of foreboding was picked up by investors who sent shares spiralling down yesterday, despite the promise of further dividends from the state-owned bank.