In October 2021, UK goods trade was 15.7 per cent, or £12.6 billion, lower than it would have been if the UK had stayed in the EU’s single market and customs union.
For many months, the CER’s cost of Brexit model
has found that UK goods trade is between 11 and 16 per cent lower as a
result of Britain’s exit from the single market and customs union in
January 2021. Using the data for October 2021, the model puts the cost
at 15.7 per cent, or £12.6 billion (Chart 1). That’s a little higher
than the estimate for September (12.2 per cent), because imports and
exports grew more rapidly in October in ‘doppelgänger UK’ – a group of
countries whose trade and other economic data closely matched that of
the UK between the referendum and the end of the transition period.
The
doppelgänger is a subset of countries selected from a larger group of
22 advanced economies by an algorithm. The algorithm finds the countries
that, when combined, create a doppelgänger UK that has the smallest
possible deviation from the real UK data until December 2019, before the
pandemic struck. (The data includes goods trade, GDP growth,
population, inflation, industrial production as a share of output, as
well as some other measures. More information on the model, including
Stata code and input data, is available here.)
CER
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