The economic damage from Brexit will be up to 10 times the probable boost from the chancellor’s Budget plans to hike public spending, economists warn.
Sajid Javid’s ambition to dramatically boost growth to 2.75 per cent a year – more than double the current rate – has also been branded “unrealistic” by the National Institute of Economic and Social Research (NIESR).
Instead, it predicts the UK economy will continue to suffer a “slow puncture” after years of low growth, because the dark clouds cast by Brexit will linger.
Mr Javid’s first Budget, next month, will be used to unveil a £100bn boost for roads, rail, broadband and other infrastructure, with the aim to “level up” the country’s poorer regions.
But in a set of gloomy predictions, NIESR warns the investment boost will take more than a decade to produce an annual GDP gain of only around 0.4 per cent.
And this, in turn, will be dwarfed by the loss of up to 4 per cent from the hard Brexit planned by Boris Johnson, creating new trade barriers with the EU, the UK’s most important market.
“Having promised the electorate both faster growth and a ‘levelling up’ in the economy, it simply cannot be delivered very quickly,” said Professor Jagjit Chadha, NIESR’s director.
“And that may further frustrate a population that demands a significant improvement in economic prospects.
“And yet free trade deals will open up the economy to the gales of competition that will seek to drive down prices in tradeable industries and may, in the short run, further accelerate job losses in those industries.” [...]
Full article on The Independent
NIESR data: Prospects for the UK economy
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