A ‘no deal’ hard Brexit would plunge the country into an immediate recession, according to a new report.
The potential Tory plan would cost the British economy £400 billion and wipe 18% off GDP growth by 2030, investment firm Rabobank warned.
The study added unemployment would also jump up from 4.6% in 2018 to 6.2% in 2020, if the country went down the route of a hard Brexit in 2019.
It said there was no good end in sight whatever Brexit the government chose to go ahead with. A free trade agreement (FTA) or soft Brexit would also apparently lead to a recession but this would be ‘milder and much more short-lived’.
A ‘no deal’ would apparently leave workers in the UK £11,500 poorer, while a FTA and ‘soft’ Brexit alternative would also leave us worse off to the tune of £9,500 and £7,500 respectively.
Hugo Erken, senior economist at Rabobank, said: ‘By looking at dynamics such as innovation, competition, knowledge and human capital, how they will change and what effects this will have on the structural make-up of the UK and European economy, our research shows that the long-lasting impact of Brexit is likely to be more severe than initially anticipated.’
Prime Minister Theresa May revealed this week she was making plans for a no deal scenario just in case.The Rabobank report added a soft Brexit and FTA agreement could cost the UK 10% and 12.5% of GDP growth by 2030. There was also bad news for other countries in the euro zone, with the rest of the nations seeing see a 2% hit to EU GDP by 2024.
The Netherlands would suffer more than others due to its close trade relationship with the UK, incurring losses of up to €35 billion. Rabobank’s study used macro-econometric modelling to assess the effects of the UK leaving the European Union.