According to a Bloomberg Economics analysis released on Tuesday, the UK economy is still losing billions of dollars per year as a result of Brexit.
According to the report, the British economy is currently 4% smaller than it would have been had the country remained in the EU, and the country will lose approximately £100 billion ($124 billion) per year after its exit from the EU in 2020.
“Did the United Kingdom commit economic self-harm when it voted to leave the EU in 2016? So far, the evidence suggests that it did. “The main takeaway is that the British economy may have been impacted faster than we, or most other forecasters, expected,” economist Ana Andrade, who co-authored the report with Dan Hanson, said.
According to analysts, the UK’s economic performance began to diverge from that of the other G7 countries following the 2016 Brexit referendum. According to them, this is due to a drop in business investment, as companies have been very cautious with spending due to uncertainty about their future outside the EU. According to calculations, the UK’s business investment is currently around 9% of GDP, compared to the G7 average of 13%.
Economists also blame Brexit for the labor shortage, which has a negative impact on the UK economy. They estimate that there are 370,000 fewer EU workers in the country now than there would have been if Britain had not left the EU.
“Labor scarcity adds to inflationary pressure in the short term and limits potential growth in the long run,” the economists wrote. “That’s bad news for an economy with bleak long-term prospects, with trend growth of just over 1%.”
The impact of Brexit on trade has been less significant thus far, according to the economists, but they warn that “in the longer term, we would expect trade to bear the brunt of the impact of leaving the single market.”
