World Economy

UK Heading Towards $348b Brexit Black Hole

No deal would reduce UK growth by 8% over 15 years.No deal would reduce UK growth by 8% over 15 years.

The British economy will suffer a £252 billion ($348 billion) hit if Theresa May carries out her threat to leave the European Union with no deal, a new analysis of official forecasts show.

A no-deal Brexit would see GDP plunge by more than a quarter of a trillion pounds over 15 years, according to the study shared with The Independent, Business Insider reported.

Less damaging exit terms, under which Britain would secure a free trade agreement with the rest of the EU, would still result in national output being £131 billion lower over the same period. And even a government U-turn–leaving the UK in the EU single market and customs union–would swipe £52 billion from economic growth, the calculation says.

The Best for Britain Group, which is campaigning to halt Brexit, said its research–based on the government’s own leaked analysis–fully exposed the “Brexit black hole at heart of the economy”.

“Sadly, now we are seeing the economic analysis becoming project fact and it means that we are facing a massive Brexit blow,” said Lord Mark Malloch-Brown, the organization’s chairman.

“Losing billions means we will have less cash for the National Health Service, our schools and our public services. This all shows the best option for communities up and down the country is to stay in and keep the deal we have.”

The calculation is the most comprehensive attempt yet to put a price on the economic damage forecast in the treasury Brexit analysis which the government was–eventually–forced to release to MPs.

It predicted a no-deal Brexit, leaving Britain trading with Europe on World Trade Organization terms, would reduce growth by 8% over 15 years.

Based on average GDP growth over the past 5 years, that would cut output from £2.62 trillion by 2033 to £2.36 trillion, Best for Britain calculated–a loss of £252.4 billion.

This week, Theresa May’s spokesperson insisted the prime minister was committed to Brexit even if MPs vote down any deal she brings back, saying: “We are definitely leaving the European Union.”

Leaving with a Canada-style free trade agreement would see growth cut by 5% which, the study says, which would mean a GDP loss of £130.8 billion.

Meanwhile, staying inside the single market would reduce growth by 2%–or GDP by £52.3 billion, Best for Britain calculated.

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