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Johnson’s Brexit deal ‘would cost UK economy £70bn’
National Institute of Economic and Social Research says growth will be 3.5% lower
A leading economic think tank says Boris Johnson’s Brexit deal will cost the UK economy as much as £70bn over the next decade compared with remaining in the European Union.
The National Institute of Economic and Social Research’s study, one of the first assessments of how the economy will fare under Boris’ deal, found that growth would be 3.5% lower in 10 years’ time under the prime minister’s proposals.
The independent forecaster rejected government claims the withdrawal agreement would spark economic growth, insisting that Johnson’s plan would not conjure a “deal dividend” for the economy.
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The Treasury has rejected the prediction, saying: “We are aiming to negotiate a comprehensive free trade agreement with the European Union, which is more ambitious than the standard free trade deal that NIESR has based its findings on.”
However, the BBC says that the study suggests that Johnson’s deal would inflict an even bigger hit on the economy than the one proposed by Theresa May.
“The new deal creates more distance from the European Union economy, with more regulatory barriers to trade. Unlike May’s deal, there could be checks on the origin of parts in the car industry, for example,” writes Faisal Islam, the BBC’s economic editor.
The Guardian points out that the intervention by Britain’s oldest independent economics research group comes after the chancellor, Sajid Javid, “shelved plans to hold an early November budget, effectively removing an opportunity for the publication of official growth forecasts ahead of an election”.
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Whatever the future holds, NIESR warns that Brexit has already done significant damage. It said that the atmosphere of uncertainty and the threat of a no-deal Brexit have stunted economic growth since the 2016 EU referendum, resulting in an economy 2.5% smaller than it would have otherwise been.
Jagjit Chadha, the director of NIESR, said: “The UK economy will continue to suffer what we’re terming a slow puncture. Not a pop, not a bang. But a slow puncture, as investment is deferred in the face of uncertainty.”
