It predicts that the failure to secure such a deal will mean the UK is forced to trade under World Trade Organisation (WTO) tariffs.
The OECD Economic Outlook states that the country’s growth will “weaken slightly” in 2017 to 1.6%, and drop further to 1% the following year.
It points to a slowdown in private consumption growth as higher inflation holds back real earnings, along with an expected contraction in business investment amid the economic uncertainty.
Last month the ONS confirmed that UK inflation is at 2.6%, it’s highest rate since 2013.
On Monday, economists at the World Bank forecast that UK GDP will grow by 1.7% in 2017, up from 1.2%, which they predicted in January.