|Published : 17 Apr 2017, 13:24:17 | Updated : 17 Apr 2017, 13:28:02|
Is UK going to gain or lose from Brexit
British ministers are keeping their heads down on the question of whether Britain is likely to gain or lose from Brexit. They say they will strike the best possible deal, but they have so far refused MPs’ demands to cost the scenario of leaving the EU without any deal, and have not given Treasury officials instructions to revisit the analysis published a year ago, according to a global media report.
The original Treasury analysis considered three outcomes for the UK after Brexit: remaining in the European Economic Area (which consists of EU states plus Iceland, Liechtenstein and Norway), striking a free-trade agreement with the EU27 and trading on World Trade Organisation terms.
It concluded that each would reduce national income by between 3.8 and 7.5 per cent, costing the UK economy between two and four years of average growth.
Economists agree that the report mostly stands the test of time but some aspects of its long-term Brexit analysis have fared badly in the year since publication. Of the total hit to national income, 1.0 percentage point in all scenarios was based on an assumption short-term turbulence would have persistent effects on the economy.