Britain's GDP Could Shrink by Three Percent Long After Brexit - Forex News by FX Leaders

Britain’s GDP Could Shrink by Three Percent Long After Brexit

Posted Thursday, May 9, 2019 by
Arslan Butt • 1 min read

Retaining a customs union with the EU after Brexit will cause the British economy to lose around three percent of its value in the long term. This is the most favorable option being considered by the opposition Labour Party.

Instead of staying with the EU, leaving in such a way would cause a loss equivalent to about 800 pounds per person per year, 10 years after Brexit. This data is from a report put out by National Institute for Economic and Social Welfare (NIESR).

A customs union arrangement with the EU will make trade a costlier proposition for the UK and limit the country’s ability to strike free trade deals with other nations. Britain’s GDP could come down by as much as 3.1 percent 10 years after leaving the EU in such a scenario, while tax revenues could come down by 2.9 percent.

While Brexit supporters feel that the customs union arrangement with the EU will give Britain greater freedom in signing trade deals with other nations, it could also lead to a reduction in access to EU markets.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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