The permanent damage of Brexit - Rabobank
|"Our results show that a hard Brexit would cost the UK 18% of GDP growth until 2030 compared to a situation where the UK would continue its EU membership," Rabobank analysts note.
Key quotes:
"In absolute terms, this comes down to a cumulative amount of £400bn, which is equal to £11,500 per British worker."
"The economic damage in our FTA and soft Brexit scenarios is less severe than in our hard Brexit scenario, albeit will still cost the UK economy roughly 12.5% and 10% GDP growth until 2030, respectively. This is equal to £9,500 (FTA) and £7,500 (soft) per British labourer over this timeframe."
"The Netherlands is an important trading partner of the UK. Therefore, a Brexit will harm the Dutch economy more than the EU average. A hard Brexit will result in GDP losses of between 3.5% and 4.5% in the long run. This is equivalent to roughly €25bn - € 35bn or €3250 - €4000 per Dutch worker. The negative impact on GDP growth in the euro area is roughly 2% in 2024 in all three Brexit scenarios
We find much larger negative effects than most existing studies that use macro-econometric modelling to assess the effects of Brexit. First, we use an improved tariff version of the macro-econometric model NiGEM, which enables us to better assess the negative impact of cost-push inflation resulting from imposed trade barriers. Second, we estimate a unique productivity model for the UK, which allows us to adequately gauge the negative UK-specific effects on productivity caused by Brexit."
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