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Hard Brexit would cost the UK 18% of GDP growth until 2030

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Staff Writer | October 12, 2017
Rabobank assessed the impact of Brexit on the UK economy in three scenarios.
Britain   Soft Brexit, FTA or Hard Brexit
Those are Soft Brexit: the UK remains part of the European Single Market, but leaves the Customs Union; FTA: the UK signs a bilateral trade agreement (FTA) with the EU, similar to the FTA between Switzerland and the EU; and Hard Brexit: the UK leaves the EU without a trade deal in place.

Rabobank's results show that a hard Brexit would cost the UK 18% of GDP growth until 2030 compared to a situation where the UK would continue its EU membership.

In absolute terms, this comes down to a cumulative amount of £400bn, which is equal to £11,500 per British worker The economic damage in our FTA and soft Brexit scenarios is less severe than in Rabobank's hard Brexit scenario, albeit will still cost the UK economy roughly 12.5% and 10% GDP growth until 2030, respectively.

This is equal to £9,500 (FTA) and £7,500 (soft) per British labourer over this timeframe The Netherlands is an important trading partner of the UK. Therefore, a Brexit will harm the Dutch economy more than the EU average.

A hard Brexit will result in GDP losses of between 3.5% and 4.5% in the long run. This is equivalent to roughly €25bn - € 35bn or €3250 - €4000 per Dutch worker.

The negative impact on GDP growth in the euro area is roughly 2% in 2024 in all three Brexit scenarios.