No Deal would impose a major hit on the economy - and there is a one in three chance the country will plunge into recession even with an agreement.
Bank of England governor Mark Carney delivered his latest chilling warning as he insisted the risk of a chaotic departure from the EU was already weighing heavily.
Failure to secure an agreement would cause the Pound to tumble even further, push inflation up, and heighten even further the danger that UK plc goes into the red, Mr Carney said.
He also ridiculed claims that the country would benefit from certainty that No Deal is happening, saying it would just 'crystalise a bad economic outcome'.
The grim assessment - which is likely to cause fury among Eurosceptics - comes as Boris Johnson engages in a brutal game of chicken with the EU over Brexit.
The PM has vowed to take the UK out of the bloc by the end of October come what may, and said there will be no more negotiations unless Brussels agrees to ditch the hated Irish backstop.
Sterling dropped again versus the US dollar today, as concern over the Brexit standoff mounts. It dipped below 1.21 for the first time since January 2017.
The record low is 1.05 in 1985.
The Bank of England governor delivered his latest chilling warning as he insisted the risk of a chaotic departure from the EU was already weighing heavily on the economy
Mr Carney, who is due to step down from the Bank next year, said Sterling could tumble further and inflation spike after No Deal
The grim assessment - which is likely to cause fury among Eurosceptics - comes as Boris Johnson (pictured at a police board meeting last night) engages in a brutal game of chicken with the EU over Brexit
The government today unveiled a £2.1billion warchest to prepare for No Deal.
But Irish PM Leo Varadkar has insisted he will not be 'bullied' by the combative from Mr Johnson.
The Bank kept interest rates on hold today, and gave forecasts based on a deal being secured with the EU before Halloween.
A Treasury minister raised eyebrows today by saying Brexit will 'hopefully' be done by October 31.
In an interview this morning, Chief Secretary Rishi Sunak adopted a considerably softer tone than Boris Johnson, who has declared the UK will leave the EU by the deadline 'come what may'.
However, he was then seemingly ordered to toughen up his language for a series of other radio and TV appearances.
Speaking on BBC Radio 4's Today programme, Mr Sunak said: 'At some point we will be leaving the European Union - hopefully by the end of October is our clear desire - so we would at some point have to do that campaign to get traders ready for the changes they'll have to do.'
But he later told LBC radio the government's position on Brexit was 'crystal clear' and the UK would leave by Halloween 'no ifs, no buts'.
But Mr Carney made his view of No Deal clear in a press conference, saying there would be an 'instantaneous shock'.
'In the event of No Deal, no-transition Brexit, sterling would likely fall, the risk premiums on UK assets would rise and volatility would spike higher,' he said.
'Similarly preparations by governments and businesses for no deal are vital to reduce the potentially damaging transition costs to a WTO [World Trade Organisation] relationship with the EU.
'But those preparations cannot eliminate the fundamental economic adjustments to a new trading arrangement that a no-deal Brexit would entail.'
Mr Carney said it would 'take some time' for the