'Gloomy' New Analysis Finds 'Hard Brexit' Will Cost Every British Worker $15,300
The UK faces a 400 billion ($532 billion) reduction in economic growth if it leaves the EU without a trade deal in place, according to an analysis by the Netherlands' Rabobank. The bank's senior economist Hugo Erken told Radio Sputnik that the prognosis after a "hard Brexit" is "pretty gloomy."
The UK faces a 400 billion ($532 billion) reduction in economic growth if it leaves the EU without a trade deal in place, according to an analysis by the Netherlands' Rabobank. The bank's senior economist Hugo Erken told Radio Sputnik that the prognosis after a "hard Brexit" is "pretty gloomy."
The cost of Brexit to the British economy could total ?400 billion ($532 billion) by 2030, according to a new report on possible trade relations after the UK leaves the EU.
Analysts from Dutch banking and financial services company Rabobank used econometric modeling to analyze three different scenarios for the UK's trade relations with the EU after Brexit. The first is a so-called "soft Brexit," in which the UK remains a part of the EU single market but leaves the customs union.
"The second scenario would be a free trade agreement, comparable for instance to Switzerland and the EU, and then we have a hard Brexit which means that the UK leaves the EU without a trade deal in place," Hugo Erken, a senior economist at Rabobank Research Global Economics & Markets, explained.
However, the last scenario "is becoming more realistic" as negotiations between the UK and EU play out in Brussels, Erken told Radio Sputnik.
On Monday, UK Prime Minister Theresa May said that Britain should prepare for the possibility of leaving the EU without a deal. She set out "steps to minimize disruption" at Britain's borders such as huge inland parking areas for trucks in order to avert long traffic queues.
Rabobank assessed the macro effects of Brexit on the UK and the EU area by modeling the short-term impact on trade flows between countries, foreign direct investment and the exchange rate.
The analysts also made a "pretty gloomy" prognosis for long-term economic growth after Brexit, analyzing variables including domestic R&D capital, human capital, the impact of the business cycle, labor participation and corporate tax level.
Rabobank found that if the UK leaves the customs union - giving it the right to set its own import tariffs - but stays in the single market allowing the free movement of goods, capital, services, and labor from the EU, then it would lose 10% of GDP growth. A scenario in which the UK makes a free trade agreement with the EU would cost the country's economy 12.5% of GDP growth.
In a "hard Brexit" scenario, the UK's potential output in 2030 is 1.3%, compared to the 2.1% that would be predicted if the country remained in the EU. The difference amounts to a cumulative amount of ?400bn, which is equal to ?11,500 ($15,300) per British worker.
Looking at the impact closer to home, Rabobank found that Dutch workers would also experience a loss of И3250 ($3845) to И4000 ($4732) per person in the case of no deal.
"What we see is that especially in a hard Brexit, the long-term growth potential of the UK is also hit quite severely and goes down from 2% to 1.3%. That is a quite substantial shock for the long-term growth potential of the UK as well," Erken said.
Sourse:sputniknews.com
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Today we sign the Treaty on Deepening and Expanding Allied Relations, a historical document, which will give a new impulse to the development of the Kazakh-Kyrgyz ties," the Kazakh President said.
Kassym-Jomart Tokayev thanked Sadyr Zhaparov and the people of Kyrgyzstan for the humanitarian aid sent due to the massive floods in several regions of Kazakhstan. He pointed out dynamic development of the bilateral contacts. In his opinion,active political dialogue, close intergovernmental and interparliamentary ties give a special impulse to the relations.
Our bilateral trade and economic cooperation strengthens year by year. Last year, commodity turnover reached $1.5 billion having increased by 26%. We set a goal to raise this indicator to $2 billion. A number of promising projects are implemented in this area. In whole, the agreements in trade-economic sector are fulfilled," the Kazakh President noted.
Special attention was given to the expansion of cultural and humanitarian ties.
Holding the Days of Culture has already turned into a good tradition. We exchange experience in education. The contacts between the youth have intensified. Today we will open the monument to Manas in Astana, which proves a high level of the Kazakh-Kyrgyz relations. We are interested in bringing them to a brand new level," he stated.
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Kazakhstan is our close partner, fraternal nation and one of the major trade partners. Kazakhstan is a priority in our foreign policy. There are no politcal or regional disputes between our countries. Since the first days of my presidency, you have constantly supported me in international structures and issues related to the expansion of the Kazakh-Kyrgyz relations. We are ready to provide all possible assistance to the fraternal Kazakh people in flood relief efforts. Our countries enjoy centuries-long friendship, fraternity, good-neighborly relations, common culture, spirituality and religion. I am confident that our mutual cooperation, strategic partnership will strengthen further," said Sadyr Zhaparov.
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