‘No Deal’ would NOT kill off our trade with EU, say experts

Leaving the european Union with- out a trade deal would not be a ‘disaster’ as Britain’s exporters will brush off the impact of tariffs, experts declared last night.

a report commissioned by top fund manager neil Woodford said falling back on World Trade Organisation rules if no trade deal is reached ‘would not have severe consequences for British exporters’.

Dismissing fears that eU tariffs on British goods would derail the economy, it said the fall in the value of the pound and the ‘diminishing importance’ of europe, which has seen its share of world gross domestic product decline from 27 per cent to 17 per cent since 1990, would cushion the blow.

in addition, the analysis by Capital economics showed that tariffs have ‘ fallen substantially over the last few decades as part of a global trend towards reducing trade barriers’.

eU tariffs would apply only to goods, not services, and the value of manufacturing to the British economy has declined from 19 per cent of economic output in 1995 to 10 per cent now.

‘Hence, the public perception of this outcome as a disaster or cliff edge is not justified,’ said the report. ‘Tariffs would not be a major barrier to British exports to the eU if the UK leaves without securing a new trading agreement.’

The comments came as the chief executive of Sainsbury’s said the UK is ‘proba- bly through the worst’ of a weaker pound fuelling food inflation.

Mike Coupe said: ‘The things that we import – things like fresh foods – get a little bit more expensive.

‘But we’re probably through the worst, and actually even today’s prices are about the same as they were two years ago, so we as a business have done a very good job of protecting our customers from the more extreme challenges of inflation and the currency movements.’

The report for Mr Woodford, who looks after more than £10billion of British savers’ money, suggested a so-called hard Brexit would see economic growth slow to 0.8 per cent in 2019 as ‘negative headwinds’ buffet the UK.

But it found there would be no recession and added that by 2027 output would be 1.1 per cent higher than it would have been if Britain had stayed in the eU.

Brussels yesterday inflamed Brexit talks by warning Theresa May that she has to decide whether to side with europe or the US. Michel Barnier, the eU’s chief negotiator, told the Prime Minister that moving away from eU rules to boost the chance of securing a trade deal with the US could scupper relations with the bloc.