‘Bad Brexit’ would hurt the UK economy for more than a decade - BBG

According to the latest research published by Bloomberg Economics analysts Dan Hanson and Jamie Murray, the UK economy will bear the brunt of a ‘Bad Brexit deal” for more than a decade.

Key Points:

“Leaving the bloc in March 2019 with no deal in place could result in a 6.5 percent hit to GDP by 2030

Bloomberg Economics calculations show a Canada-style trade agreement would be better than no deal, though that would still leave the economy smaller than if the U.K. staying in the bloc. 

Hanson and Murray said in the report: “It’s welcome news that talks will move on to trade this year, but that doesn’t mean the talks will get any easier -- if anything, the opposite is true. The specifics of the Irish border or financial services being excluded from any trade deal are probably the most likely triggers for a breakdown at the negotiating table.”

If the U.K. fails to secure a deal and starts to trade with the bloc under WTO rules upon leaving in March 2019, the pound would depreciate, and currency effects and tariffs would push inflation to 3.6 percent by the end of the year. There would also be a hit to jobs, consumption, and investment.”