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Brexit: Sir Vince Cable warns of 'second economic storm'

Brexit could trigger a bigger slump than the 2008 financial crash, the Liberal Democrats' veteran economic guru Sir Vince Cable is claiming.

Speaking as he launches his campaign to win back his Twickenham seat in the general election, he is predicting a "second economic storm".

Sir Vince, 73, who was business secretary in the 2010-15 coalition government, is credited by supporters with warning of the first global financial crisis as long ago as 2003.

He warned then of the dangers of excessive lending by unscrupulous US mortgage lenders and of consumer spending on credit creating massive personal debt in the British economy.

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But during the crash, his Tory critics accused him of "flip-flopping" for criticising quantitative easing - increasing the supply of money to encourage spending - and then later advocating it.

Now Sir Vince claims a combination of falling consumer confidence, job losses, and inflation has the potential to outstrip the credit crunch storm if Theresa May pushes through a hard Brexit.

Speaking ahead of his campaign launch, Sir Vince - a former chief economist for Shell (LSE: RDSB.L - news) - said: "For Britain, the economic weather is arguably worse than it was before the credit crunch.

"The pound has plummeted, which is driving up prices and trapping consumers in a vicious Brexit squeeze.

"Consumer confidence was all that kept the storm clouds away. But with job losses at everywhere from Deutsche Bank (IOB: 0H7D.IL - news) to Nestle (Swiss: NESN.VX - news) , that confidence is going to drain away further.

"The Chancellor clearly has no confidence in the economic strategy of the Government, because he knows that leaving the single market and customs union has the potential to devastate the UK economy."

He added: "If Britain enters a second economic storm, it will be Theresa May's economic storm. You can't have a hard Brexit and a strong economy.

"That is why it is vital that the General Election produces a large increase in MPs (BSE: MPSLTD.BO - news) who understand why it is essential to remain in the single market and customs union."

After winning Twickenham from the Conservatives in 1997, Sir Vince was one of the 2015 election's most high-profile casualties when his 12,000 majority was overturned by the Tories' Tania Mathias, who won by more than 2,000 votes.

The pro-Remain Lib Dems now have high hopes of recapturing the seat after they ousted pro-Leave Zac Goldsmith in the next-door seat of Richmond Park in a by-election last December.

Both constituencies voted heavily for Remain in the EU referendum.

Meanwhile, Brexit Secretary David Davis and shadow chancellor John McDonnell will both be campaigning in the North West.

Scotland's First Minister Nicola Sturgeon will be on the stump outside Glasgow and UKIP leader Paul Nuttall will formally launch his party's election drive.