Brexit has harmed the UK economy almost twice as much the official estimates, according to a new working paper published by US-based National Bureau of Economic Research (NBER).<\/p>\n
The paper examines the impact of the United Kingdom\u2019s decision to leave the European Union (Brexit) in 2016 using almost a decade of data since the referendum.<\/p>\n
The 2016 decision has cost the country 6-8 per cent of gross domestic product (GDP) per person over the last decade, a hit of between \u00a3180 billion and \u00a3240 billion (~$235.67 and ~$314.22 billion). The UK Office of Business Responsibility (OBR) puts the damage at just 4 per cent.<\/p>\n
Brexit has harmed the UK economy almost twice as much the official estimates, a new paper by US-based National Bureau of Economic Research said.
\nThe decision has cost the country 6-8 per cent of GDP per person over the last decade, a hit of between \u00a3180 and \u00a3240 billion (~$235.67 and ~$314.22 billion).
\nInvestment was reduced by 12-18 per cent, employment by 3-4 per cent and productivity by 3-4 per cent.<\/p>\n
The paper was authored by Nicholas Bloom, Paul Mizen, Pawel Smietanka, Gregory Thwaites and senior Bank of England economist Philip Bunn.<\/p>\n
\u201cWe estimate that investment was reduced by between 12 per cent and 18 per cent, employment by 3 per cent to 4 per cent and productivity by 3 per cent to 4 per cent. These large negative impacts reflect a combination of elevated uncertainty, reduced demand, diverted management time, and increased misallocation of resources from a protracted Brexit process,\u201d reads the paper\u2019s abstract.<\/p>\n
Comparing these with contemporary forecasts shows that these forecasts were accurate over a five-year horizon, but they underestimated the impact over a decade, the abstract notes.<\/p>\n
Finance Minister Rachel Reeves pointed the finger at Brexit for the UK\u2019s economic deterioration at the annual meetings of the International Monetary Fund last month.<\/p>\n
The UK formally left the EU single market and customs union in January 2021, replacing them with a free-trade agreement.<\/p>\n
The impact of Brexit \u2018accumulated gradually\u2019 and was hard to identify in 2018, but picked up as uncertainty persisted, trade barriers rose and firms diverted resources away from productive activity, the authors of the paper said.<\/p>\n
Leaving the EU increased uncertainty, hurt investment, damaged demand, weakened employment and hit productivity due to \u2018reduced innovation\u2019, the working paper added.<\/p>\n
<\/p>\n
Fibre2Fashion News Desk (DS)<\/p>\n
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