30 October 2019

POLITICO: Brexit deal would leave Wales-sized hole in UK economy, experts warn

The agreement struck between the UK government and Brussels will leave gross domestic product 3.5% lower every year than if Britain remained an EU member, according to new analysis by the National Institute of Economic and Social Research (NIESR).

That amounts to a loss of £1,100 per person per year or £70 billion annually overall — roughly the size of the Welsh economy.

The deal would see the U.K. leave the EU single market and customs union, increasing trading barriers across the Irish Sea in the process, while aiming to sign Britain up to a free-trade agreement with the bloc later on.

Johnson has said quitting the EU would provide a “Brexit dividend” for Britain, but NIESR said no such dividend exists.

Arno Hantzsche, principal economist at the think tank, said it is a plus that the deal reduces the risk of a no-deal Brexit. But he said the agreement would still have a negative impact on the economy because it would “eliminate the possibility of a closer relationship” once the U.K. leaves the two major trading areas.

“It means that future trade will face significantly higher barriers both with goods and services,” he said. “And that means that we would not expect there to be a boost to the economy.

“In fact what we estimate is that in the long run the economy will be 3.5 to 4 percent smaller every year. This corresponds, in today's money, roughly to the size of Welsh economic output.” [...]

Full article on POLITICO

NIESR research

 

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