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The knock-on hit to the public finances is now £26 billion per annum – or £500 million a week.
The cost of the Brexit vote has been the subject of intense debate, with Leave and Remain-supporting commentators seizing on positive and negative economic data and company announcements to reinforce their case. In the aftermath of the referendum the UK economy outperformed expectations, thanks in large part to British consumers dipping into their savings. But since the start of 2017, Britain’s economy has grown by an average of just 0.3 per cent each quarter – despite an acceleration in the pace of global growth. Advanced economies are currently growing twice as fast as the UK (0.6 per cent) on average.
The culprit is the vote for Brexit, as our findings demonstrate. In June 2018, we published our first estimate of the cost of the decision to leave the EU, based upon a modelling exercise, and found that the British economy was 2.1 per cent smaller by the end of the first quarter of 2018. According to our revised model, which uses a broader set of data, the British economy was 2.5 per cent smaller in the second quarter of 2018 than it would have been if the referendum had gone the other way: the cost is growing. [...]