UK economy haemorrhaging £600m a week because of Brexit – Goldman Sachs
Brexit has cost the British economy £600 million a week since the referendum, and the shock of a no-deal divorce could hammer the country even harder.
A new report published by investment banking giant Goldman Sachs suggests that since the June 2016 vote, nearly 2.5% has been shaved off GDP.
It argues that had UK voters opted to remain, the economy would have been in a much stronger position, instead of underperforming and lagging behind other advanced economies.
Goldman’s number crunchers concluded that investment has been one of the biggest casualties of the Brexit debacle, confirming official data which has shown it in decline.
“The component-level breakdown reveals that output losses have been concentrated in investment and private consumption.
“The outsized impact on investment suggests that political uncertainty associated with the Brexit process may, indeed, be one of the major sources of the economic cost of Brexit,” the report read.
The report echoes a Bank of England analysis that suggested around £40 billion per year, or £800 million per week, of lost income for the country as a whole since the result of the leave vote.
It comes as MPs remain in deadlock over Britain’s divorce terms, with a series of indicative votes due on Monday evening that aim to chart the course of the nation’s EU exit.
Goldman added that under a no-deal scenario, favoured by the most extreme Tory Brexiters, the UK will be a big loser, but its European neighbours would also suffer.
It said: “Under our ‘no-deal’ scenario, the UK suffers large output losses, in conjunction with a substantial global confidence shock marked by a sharp sterling depreciation. European countries would be most exposed to this scenario and could see output losses of around 1% of real GDP.”
Conversely, a “status quo” Brexit transition deal would reverse part of the UK’s output underperformance and, under a remain scenario, the UK “fully recoups Brexit-related output costs and business confidence rebounds”.