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London is at “immediate risk” of a hugely damaging £22 billion economic hit in the event of a worst-case scenario hard Brexit, a report warned today.

The capital is more exposed than the rest of Britain to a chaotic cliff-edge departure from the European Union because of its heavy dependence on the services sector — particularly financial services — and its reliance on skilled workers from the Continent, it says.

This means that a “no-deal” scenario next March would see the capital’s economic growth slump into the slow lane compared with the rest of the UK, according to the study from the respected City forecasters CEBR.

It says Brexit could cost London 5.5 per cent of growth — equivalent to £22 billion of output — over 15 years. That is more than £2,500 for every man, woman and child living in London.

The report, Brexit And The Metropolitan Areas, commissioned by the London Chamber of Commerce and Industry, concludes that the economy of London, “is at immediate risk from Brexit if not handled carefully”.

The report, co-written by the CEBR’s chief economic adviser Vicky Pryce and its founder Doug McWilliams, says the effects could be mitigated by new trade deals and by cutting red tape and but says these “highly speculative” gains have to be compared with the “relatively certain” losses from lost EU trade and reduced migration.

Whereas London’s growth has easily surpassed that of the UK as a whole for most of the past 30 years, it would lag behind until at least 2024 after Brexit, says the report, which also looked at the impact on Manchester and Bristol.

The chamber said that the business community still faced massive uncertainty about Brexit and needed a transition period of up to five years.

Colin Stanbridge, chief executive of the LCCI, said: “There is still a heck of a lot of uncertainty and the possibility of a very large downside.”

Will Tyler, chief executive of Brentford-based graphics company Octink, which has many clients in the construction sector, said the fog shrouding the Brexit outcome meant businesses were putting off investment decisions until “two minutes to midnight” creating volatile trading conditions. He said: “Businesspeople are only making decisions right at the last knockings. Would you commit to something in 10 to 12 months’ time in the current climate?”