Mike Russell: Scotland facing ‘deep recession’ under no-deal Brexit

A No deal Brexit could plunge Scotland's economy into a "deep recession" with widespread job losses and firms leaving the country, Brexit Secretary Mike Russell has warned.

Scots could also face food price hikes of 5-10% with rural areas of the country facing particular issues, he told MSPs at Holyrood.

The cabinet Secretary spoke out as the likelihood of a No deal scenario looks increasingly likely, with Prime Minister Theresa May struggling to salvage her much-maligned Withdrawal Deal after its Commons rejection.

Mike Russell has warned of a recession

He warned: "A No-Deal Brexit has the potential to generate a significant economic shock which could tip the Scottish economy into recession - potentially into a deep recession.

"It would also have a severe impact on the labour market resulting in potential job losses, business relocations and closures, underemployment and a reduction in recruitment."

He even called for extra cash reserves be to pumped into the banking system, with small business likely to be worst hit.

Fears of freight delays at Dover and through the channel tunnel could hit goods coming to Scotland, with rural areas worst hit.

Mr Russell added: "Transport Scotland is also working with transport providers and ports and airports in Scotland to assess their existing capacity and identify how they could help mitigate disruption and ensure that Scotland’s exporters can continue to get their goods to market."

The absence of a trade agreement between the UK and the EU would result in World Trade Organisation (WTO) tariffs for imports and exports is also expected to see significant price increases, MSPs heard, particularly for food and drink.

"The Governor of the Bank of England has identified potential rises of between 5-10%," Mr Russell added.