Though the UK could strike new trade deals with non-EU members states, primarily in services, and possibly at a faster pace than the unwieldy beast of the EU's 27-state block, larger economies were generally better at securing preferential outcomes for themselves, the report argued. Without the weight of the other member states behind it, the UK would find itself almost always in a weaker position in trade negotiations, it said.
The only other potential benefit outlined by the report was the ability to further relax regulation. However, the report also argued that these circumstances, in a country that was already "one of the most lightly regulated economies in the developed world," would be harmful to the UK's ability to do business with other EU countries since doing so depended on adhering to EU common standards.
[...] the report issued the unfortunate news that the estrangement looked highly likely to end in divorce at this stage. [...]
The report seemed to echo this sentiment, particularly for the UK, outlining a possible reduction in its long-term economic growth from 2.2% to 1.8%. The forecast was based on the assumption that Britain would lose its EU financial services passport.
Though it wasn't all doom and gloom. Despite EU council president Donald Tusk's remarks earlier this week that Britain must make "sufficient progress" in its withdrawal from the Union before any negotiations around a trade deal could begin, the report set out a "good chance" that the UK would ultimately make an agreement. However, it pointed to the issue of immigration as a potential stumbling block in the ability to do so.
In terms of wider impacts of the departure from the EU, the report highlighted the possibility of a second referendum on Scottish independence. Though it said support for the issue had declined since the 2014 vote on the issue and estimated a 40% probability of such a split coming to pass.
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