|
|
The Centre for Economics and Business Research, a think-tank, predicted that such a level of stockpiling would boost gross domestic product by half a percentage point in the three quarters up to the March 29 Brexit deadline because of increases in production and processing linked to the additional imports.
The flipside is that GDP would then fall by the same amount for the remainder of 2019 as companies run down their inventories because demand would not be met from production. “This makes a post-Brexit mini-recession almost inevitable,” said Douglas McWilliams, CEBR founder. [...]
But the CEBR said the biggest cause of inventory disruption would be the stockpiling of raw materials, such as chemical feedstocks and ores, and of semi-manufactured goods, such as car and aircraft components, which comprised about £100bn of the £260bn of imports from the EU in 2017.
It calculated that an additional three months’ of raw materials and semi-manufactured goods, plus an extra month of finished manufactured goods, would add up to an extra £38bn of imports.
That amounted to less than 2 per cent of annual GDP, said Mr McWilliams. “Obviously, since these are imports, they do not directly add to GDP but there is associated production and processing associated with such imports and they should add about a quarter of this amount [about £10bn] to GDP. [...]
Full article on Financial Times (subscription required)