The UK is on the precipice of another recession, Kezia Dugdale has said.
Speaking at a Scottish Co-operative Party event at the Scottish Labour conference in Dundee on Saturday, she said people on low incomes will be hardest hit by the economic impact of Brexit.
The UK is set to depart the European Union on March 29, with no agreement yet in place at Westminster which would avoid a no-deal exit.
Former Scottish Labour leader Ms Dugdale said: “I think we’re on the precipice of another recession and I think we’re definitely on the cusp of another cost of living crisis, driven largely by Brexit – which I fundamentally believe will be an economic disaster, the consequences of which will be borne by the poorest and those in insecure work.
“So there are going to be financial pressures on the poorest communities and they’re going to come fast.”
She also said the increasing use of making payments online and via mobiles, as opposed to using physical cash, could isolate people who do not have access to such services, and she cited the reduction in the number of cash machines.
Ms Dugdale said the lack of access to physical money risks a rise in the number of people turning to payday lenders to get by.
“There are predictions that the cost of food could increase by about 40%. So that pressure on people to do the basics – to buy food, to pay their bills – is going to get rapidly greater over the coming weeks and months,” said Ms Dugdale.
“And that could lead to more people looking for quick credit, quick loans, quick cash to help them make ends meet.”