According to research firm Baker & McKenzie, if Boris Johnson’s government fails to secure a post-Brexit trade deal with the European Union along with the impact the coronavirus is having on the British economy, their combined cost to the United Kingdom will be around $174 billion (134 billion pounds) each year in lost GDP for the next years.
Johnson has set October 15, 2020 as a deadline for clinching a post-Brexit trade deal with the EU. The United Kingdom is scheduled to leave the bloc at the end of this year.
Already the Wuhan coronavirus has eaten into Britain’s GDP by 2.2% said Baker & McKenzie in a report titled “The Future of UK Trade: Merged Realities of Brexit and COVID-19.” Brexit will have a compounding impact on Britain’s economy, with or without a trade deal, and even with a trade deal, it will cut its GDP by 3.1% in the long-run relative to a hypothetical scenario where the UK remained in the EU, while exports of goods would be 6.3% lower, said Baker & McKenzie. Without a trade deal, the cost of to Britain will increase from 3.1% to 3.9% in the long run.
“Despite businesses taking steps to offset the added costs of Brexit by reconfiguring supply chains, the decline in export revenues for UK manufacturers will be substantial,” said Baker & McKenzie. “With the costs of the UK’s departure from the EU likely to be very high, the government will need to use all the tools at its disposal to help mitigate the economic damage.”
While supporters of Brexit opine that Brexit’s economic impact have been overly pessimistic, oppononents of Brexit say, it will cost the country dearly in terms of both, money as well as influence, in the decades to come.