Brexit gets harder
A hard Brexit without a trade agreement could cost the UK up to 18% of GDP growth through to 2030, equating to £400 billion – or £11,500 per British worker – compared to retaining EU membership. In addition, economic growth in the Eurozone is set to drop 2% by 2024 due to Brexit, according to a report from Rabobank.
The bank also says it expects labour-augmented technological change to stall whatever the Brexit scenario, which implies that tech advances will affect fewer jobs, compared to if the UK remains in the EU.
“There has been extensive economic research into the immediate effects of Brexit, but they have largely focused on trade and investment, whereas implications of the different factors that affect productivity is only marginally or partially addressed,” says Hugo Erken, senior economist at Rabobank. “By looking at dynamics such as innovation, competition, knowledge and human capital, how they will change and what affects this will have on the structural makeup 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.”