MPs must end their “brinkmanship” to avoid a no-deal Brexit that would shrink the UK economy by as much as 8 per cent and put thousands of jobs at risk, a leading business group has said..

A disorderly exit from the EU would have “profound, widespread and lasting” economic effects and cannot be “managed” as some MPs have claimed, Carolyn Fairbairn, director-general of the Confederation of British Industry, said in a speech on Friday.

Ports would be disrupted, financial services firms would be at a “sharp disadvantage” and trade deals with countries such as Japan, South Korea and Turkey would be lost, the CBI head warned.

As MPs prepare for a crucial vote on Theresa May’s Brexit deal on Tuesday, the CBI is warning that it is too big a gamble to hope that parliament will “blink at the brink” and vote in favour.

Ms Fairbairn called on the government to immediately set out its plan to avert a no-deal scenario so that the country can move beyond the “all-consuming obsessions” of Brexit.

The CBI also criticised the government’s immigration proposals, which, if implemented, would cost businesses £1,000 per year per worker and give only a year to prepare for the end of free movement.

“It’s simply not enough time,” Ms Fairbairn said. “And it is now time to say so.”

The business group is pressing the need to win public support for a new, independent immigration policy.

“It must take us beyond the generalisations and stereotypes, which, in the past, hampered honest debate,” Ms Fairbairn said.

“We rely on workers from abroad for so much. To harvest our food, build our homes, care for us in our hospitals and our old age. To help us win new contracts, bring new skills, ideas and insight.

“One consequence of the historic lack of informed debate about immigration in this country is a lack of understanding about the scale of overseas workers’ contribution.

“So it’s up to us – the business owners, leaders and managers – to explain how overseas workers bring skill, innovation, and enterprise.