It has now been officially announced that the British economy would be hit by Brexit, the exit of Britain from the European Union.
The economic fallout related to a number of Brexit scenarios have been published by government.
All of the scenarios that the UK government examined had showed the country to be worse for all eventualities. While not estimating the exact impact of the deal Prime Minister Theresa May has negotiated with the European Union, officials said that the UK economy would be be in a worse stage even under the best case scenario compared ot what it would have been if it had remained with the EU.
“It is true that the economy will be very slightly smaller, but if we do the deal in the way that the prime minister has set out and negotiated, that impact will be entirely manageable,” UK Treasury chief Philip Hammond told the BBC.
The harsh reality that Britain would be poorer because of Brexit – under all circumstances than if it had remained with the EU is underscored by the official estimates.
“If you look purely at the economics, remaining in the single market would give us an economic advantage,” Hammond said.
Just four months remain for the onset of Brexit and analysts say that it is not yet clear whether it would be possible for May would be able to ensure an orderly departure form the EU.
Businesses would be given the much-needed certainty about the next two years because of the legally-binding divorce deal that May has negotiated.
However the British parliament is yet to approve the deal May still has to pass a agreement on the trading relationship and it provides very little detail.
The deal proposed by May would result in the UK economy being 4 per cent smaller by 2030 compared to what it would have been if it had remained with the EU, concluded the report that was commissioned by a group that has been campaigning for a second referendum on Brexit. Creation of new trade barriers would discourage investments and selling services from the United Kingdom would get more difficult, said the National Institute for Economic and Social Research on Monday.
“The important thing … is to keep trade flowing as much as we can,” Hammond told Sky News.
According to the Brexit plan by May, most of the trading rules for companies would remain the same during a transition period. The deal also promotes broad cooperation on transportation and energy and closer relationship with the European Union on trade in financial services.
A chaotic Brexit would be the worst possible outcome, say economists. Analysts have warned that the UK economy would go into recessions if it crashes would of the EU
If there is no deal before UK leaves the EU, the country’s economy would get smaller by 7.7 per cent within 15 years following Brexit, the government said. That is based on a comparison to the trading arrangements in place currently and assumes that there would be no change in immigration rules. The government said that in case the net migration from the European Union reached zero, the damage would be even more.
“It surely puts to bed some of the more far-fetched ideas that a hard landing Brexit will not seriously hurt the economy,” said Rain Newton-Smith, the lobby group’s chief economist.
(Adapted from CNN.com)