UK to Be Worse Off In Ev­ery Sce­nario


LON­DON (Dis­patches) - The U.K. would be worse off in ev­ery sce­nario should it pro­ceed with Brexit, ac­cord­ing to a leaked gov­ern­ment anal­y­sis of the eco­nomic im­pact of leav­ing the EU.

The anal­y­sis, ti­tled “EU Exit Anal­y­sis - Cross White­hall Brief­ing” and dated Jan­uary 2018, looked at three pos­si­ble sce­nar­ios: a no-deal sce­nario, in which the U.K. would re­vert to World Trade Or­ga­ni­za­tion (WTO) rules, a com­pre­hen­sive free-trade deal with the EU and a con­tin­ued sin­gle-mar­ket ac­cess through a Euro­pean Eco­nomic Area mem­ber­ship.

The doc­u­ment, which was meant to be shown con­fi­den­tially to cab­i­net min­is­ters this week, was leaked in what was de­scribed as an “em­bar­rass­ing” de­vel­op­ment to Prime Min­is­ter Theresa May and Brexit Sec­re­tary David Davis.

Un­der a no-deal sce­nario, the U.K. would see eco­nomic growth re­duced by 8 per­cent.

Un­der a com­pre­hen­sive free trade agree­ment with the EU, growth would be re­duced by 5 per­cent over the next 15 years. How­ever, if the U.K. re­tained ac­cess to the sin­gle mar­ket and be a Euro­pean Eco­nomic Area mem­ber, eco­nomic growth would be re­duced by only 2 per­cent.

Nonethe­less, the im­pact as­sess­ment does not take into ac­count the short-term ef­fects that Brexit will have on the econ­omy, such as ad­just­ing the econ­omy to new cus­toms ar­range­ments and rules, which could prove worse than the afore­men­tioned statis­tics.

When look­ing at the sec­tors most af­fected, the doc­u­ment stated that man­u­fac­tur­ing, re­tail, cars, food and drink, and chem­i­cals would all face neg­a­tive ef­fects in all three sce­nar­ios.

All re­gions of the U.K. would also be af­fected neg­a­tively, with the north­east, the West Mid­lands and North­ern Ire­land fac­ing the big­gest de­clines in eco­nomic per­for­mance.

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