May 18, 2021

The British Government estimates that the GDP of the United Kingdom will be reduced to 9.3% after the departure of the EU

The British Government estimates that the GDP of the United Kingdom will be reduced to 9.3% after the departure of the EU


Specifically, London has calculated that if the country remained in the European Economic Area, with a similar treatment to that of Iceland, Norway or Liechtenstein, its GDP would be reduced by 1.4% in 15 years compared to its current state.

On the other hand, if Brussels had accepted the agreement that the Executive of May raised in July, in the same time horizon, the economy of the United Kingdom would contract by 2.1%, due to the increase in trade barriers.

Third, in a scenario where London and Brussels agree to a free trade agreement, the GDP of the United Kingdom will fall by 4.9%, while if there is a disorderly exit without agreement, the British economy will be a 7, 7% lower

However, these figures assume that there will be no change in immigration. If the entry of workers from the rest of the countries of the European Union falls to zero, the contraction of the British GDP compared to the current situation in a period of 15 years will be 3.9% for May's proposal, 6.7% for the free trade agreement and 9.3% in case nothing is agreed.

The report presented by the Executive of Theresa May does not value the agreement reached between London and Brussels. However, the Bank of England has yet to publish, also on Wednesday, its estimates of possible scenarios in the Brexit.

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