No deal: the economic consequences and how they could be mitigated

This macroeconomic study of the impact of a ‘No Deal’ Brexit concludes that a UK withdrawal from the European Union without a preferential trade deal would not be ideal and would bring some material costs. However, it would be a relatively mild negative economic event. Brexit will therefore not be the determining factor for the UK economy’s medium-term growth prospects. Open Europe’s strong recommendation remains that the Government seeks to secure a negotiated exit from the EU, while also being prepared for all scenarios including a ‘No Deal’ exit in March 2019. Our model suggests that a No Deal Brexit would mean the UK economy continuing to grow but with an effect equivalent to an average annual drag of -0.17% on real GDP growth over the 13 years up to 2030. This could be reduced to an average reduction in growth of -0.04% a year if the government deploys maximum mitigation measures in the form of unilateral trade liberalisation. The economic impact of an exit on so-called WTO terms is, over a 13 year period, small. And as we go on to demonstrate, the effects are limited in comparison with the forecasting noise typically seen in GDP models.

Read Full Report

Explore our reports

  • Reset
Advanced search