Boris Johnson news: Tories on brink of losing majority as top Brexiteer attacks Farage for splitting by-election vote

What does a no-deal Brexit mean?

Boris Johnson has suffered a blow to his authority after the Liberal Democrats overturned the Tory majority in Brecon and Radnorshire by-election, powered by a "Remain alliance".

Jo Swinson, the new Lib Dem leader, suggested future electoral pacts between pro-EU parties after Plaid Cymru and the Greens threw their weight behind her party for the ballot, which reduced the Tory majority to only one.

"It is still eminently possible to stop Brexit," she said, at an event at the Edinburgh Festival Fringe.

"Delivering a People's Vote is still an option - the way in which in March we took control of the order paper - that is something which could be done again.

"We are going to explore different strategies."

She added: "What happened in March was that a motion was used to take control of the order paper, so that it was not only the Prime Minister or the leader of the House on a given day that was able to initiate what the business would be.

"So there are ways around it. And then you get into - is that better achieved by a vote of no confidence to bring the government down, or is it about bringing forward a Bill to secure a People's Vote."

Ms Swinson's comments come as a leaked Whitehall document laid bare widespread fears of consumer panic, rising crime and economic chaos in the aftermath a no-deal Brexit.

Jeremy Corbyn, the Labour leader, said the party's fourth place position in the by-election was "disappointing".

If you would like to see how events in Westminster unfolded, please see what was our live coverage below:

[2 August 2019 08:21 · Lizzy Buchan]

Welcome to The Independent's politics liveblog, where we will be bringing you the latest updates throughout the day.

Here is today's front page:

[2 August 2019 08:41 · Lizzy Buchan]

Boris Johnson has suffered a significant blow after the Liberal Democrats won the Brecon and Radnorshire by-election, slashing the new prime minister's Commons majority to just one.

Jane Dodds, the Lib Dem candidate, overturned a Tory majority of 8,083 to defeat incumbent Chris Davies by 1,425 votes in the Welsh constituency.

Here's our wrap on this morning's big story:

[2 August 2019 08:52 · Lizzy Buchan]

A leaked Whitehall document has laid out the grim assessment by senior mandarins of the impact of a no-deal Brexit.

[2 August 2019 09:06 · Lizzy Buchan]

Liberal Democrat leader Jo Swinson predicted further electoral pacts between pro-EU parties following the success in Brecon and Radnorshire.

She said the result sent a "really clear message that the country doesn't have to settle for Boris Johnson or Jeremy Corbyn, there is another positive alternative that is winning again and on the up and that is the Liberal Democrats".

Ms Swinson told BBC Radio 4's Today: "I do think that working across party lines is important when there is so much at stake for the future of our country and I will continue to do that.

"I've exchanged messages this morning with the Green and Plaid leaderships and I think there will be more co-operation in future elections."

[2 August 2019 09:22 · Lizzy Buchan]

Here's a clip of Jane Dodds, after she won the by-election in Brecon and Radnorshire.

[2 August 2019 09:35 · Lizzy Buchan]

Mark Carney has rejected criticism of his stance on Brexit, insisting the "challenges" posed by a no-deal departure from the European Union should not be played down.

A "substantial number" of firms would find they were no longer competitive as a result of a sudden shift to World Trade Organisation rules on 31 October, he warned, and a fall in sterling would lead to price rises for food and fuel.

The Bank of England Governor told the Today programme: "The economics of no-deal are that the rules of the game for trade - exporting to Europe or importing from Europe - fundamentally change.

"There are some very big industries in this country where that which is highly profitable becomes not profitable, becomes uneconomic, and very difficult decisions will need to be taken.

"That has knock-on effects on the economy in the short term."

Mr Carney said the shock to the economy would be "instantaneous" in a no-deal Brexit.

He told Today: "One would expect prices to go up. It's reasonable to expect, the markets are absolutely clear on this, that in the event of no deal the exchange rate would go down for a period of time.

"And the area of the economy where that instantly translates into prices - it's at the forecourt of the petrol station and in fruit and veg."

Mr Carney said he was not commenting on the longer-term impact of a no-deal Brexit but added: "It may take a while to get to the sunlit uplands."

[2 August 2019 09:43 · Lizzy Buchan]

The Independent Group for Change also stood aside to make room for the Liberal Democrats in Brecon. It's leader - ex-Tory MP Anna Soubry - tweets her congratulations. 

[2 August 2019 10:02 · Lizzy Buchan]

[2 August 2019 10:18 · Lizzy Buchan]

Britain faces a one in three chance of recession even if there is an orderly Brexit, the Bank of England has warned, as it slashed its forecasts for economic growth over the coming year but held interest rates steady at 0.75 per cent.

And a no-deal Brexit would mean even slower growth, a further hit to the value of sterling and rising inflation, the central bank forecast.

Governor Mark Carney issued the stark warning as the pound continued to plunge, reaching its lowest level against the dollar in two and a half years, while other data showed a sharp decline in UK manufacturing.

[2 August 2019 10:38 · Lizzy Buchan]

Naomi Smith, chief executive of Best for Britain, said the Brecon by-election result proved the success of electoral pacts.

She said: "While the Leave side has an inherent advantage in elections due to its vote being concentrated between only two parties whereas the pro-EU vote is split across at least four, working together can clearly help beat those odds.

"More than 100,000 people have now signed our petition calling for these parties to work together. Now that we know it works, we will continue meeting internationalist MPs from all parties and use this model to prevent the Brexit extremists from getting a majority in the event of an election."