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United KingdomEconomy2 days ago

Brexit cost 6% of UK economy, Bank of England company data suggests

A study analyzing Bank of England data suggests that Brexit has caused a 6% decline in the UK economy over the past decade. The research estimates that roughly half of this loss was due to the initial uncertainty following the referendum, while the other half resulted from increased trade barriers after leaving the EU's customs union and single market in 2021. Critics argue the study doesn't fully consider factors like the strong performance of U.S. tech sectors or the European energy crisis. Professor Nick Bloom, co-author of the study, stated that the UK could have maintained stronger growth

The civil servant who led Britain’s preparations for leaving the EU has called on political leaders to open a debate over rejoining the bloc , as he declared “Brexit is not done”.

Sir Keir Starmer has ruled out reversing Labour’s election manifesto pledge to honour Brexit, but Philip Rycroft, who was permanent secretary of the Department for Exiting the EU, told The Independent there was a case to be won on rejoining the EU, adding it was time for a sensible national debate on Britain’s best interests.

He argued there had been dramatic world changes since the referendum 10 years ago , and that assumptions made then had been “badly hit” by geopolitical events, including Russia’s invasion of Ukraine and its threat to western Europe.

The UK, he said, was also poorer as a result of leaving the single market on trade, with long-term estimates from the Office for Budget Responsibility (OBR) predicting a 4 per cent loss in UK Gross Domestic Product (GDP) growth after 15 years.

Calling for a debate on Britain’s future relationship with the EU, including rejoining the union, Mr Rycroft, who has also written for The Independent today, said: “Brexit is not done, Brexit will never be done.

“We can never not have these debates because they are so critical to our economic, defence and security future.

Philip Rycroft, who was permanent secretary of the Department for Exiting the EU, has called for a debate over the UK’s future relationship with the EU (Philip Rycroft)

“In the interest of the British public, ultimately, I am saying I think that our political class do have a responsibility to seek the opportunities, to seek to open out these questions in a way that gives the public the chance to think through where they believe our long-term interests lie.”

Mr Rycroft’s comments chime with a growing feeling within the Labour Party. Despite resisting crossing red lines on joining a customs union or the single market, Sir Keir has come under pressure to pursue a closer relationship with the EU.

Last month, he vowed to set a “new direction for Britain” with tighter links with the bloc ahead of an EU summit next month.

Wes Streeting, Sir Keir’s former health secretary and one of the frontrunners to succeed the prime minister if a leadership challenge is triggered, has said the UK should rejoin the bloc. Another leadership contender, Andy Burnham, has held back on EU support as he campaigns for a by-election in Makerfield, which voted strongly in favour of leaving the EU in 2016.

Mr Rycroft’s intervention comes as The Independent has launched a campaign to rebuild the UK’s relationship with Europe.

However, there is also strong feeling against tightening the relationship, with Reform UK, which is against any way back, continuing to perform well in the polls.

Mr Rycroft said: “We are a European country; our future lies ineluctably in Europe because that’s where we are, and we have to find a path forward where the vast majority of people in this country accept that the relationship that we’re in or we’re heading towards is one that is in the UK’s interests.

Sir Keir Starmer is expected to meet EU leaders including French president Emmanuel Macron, at the UK-EU summit in July (Stefan Rousseau/PA) (PA Wire)

“I would love to wave a magic wand to get us to that point, but I absolutely recognise this is deeply contested territory. A lot of people think that we have a different sort of path ahead of us, which doesn’t relate to our European-ness. Good luck to them, but let’s have that debate.

“We’re still, frankly, living through the afterburn of what was a very difficult and divisive referendum, but we have to start thinking about what the long-term future looks like, and to do so in a dispassionate, honest sort of way that doesn’t slip back into some of those rather old, boring remain-leave arguments.”

Ahead of the UK-EU summit, UK officials pitched a single market for goods trade with the EU. But the move was rejected, reported The Guardian , in favour of a suggestion that the UK join a customs union.

Sir Keir faces a challenge in striking a pick-and-choose deal, without revisiting manifesto promises to rejoin the EU single market or customs union, or to end freedom of movement.

Mr Rycroft said rejoining the EU would be a “tough road with lots of compromises, lots of difficult decisions”, but also warned of the risk of Russia’s “threat on democratic way of life” and the uncertain relationship with the US. The UK could not solely rely on its Commonwealth and Anglosphere to deal with issues currently faced, he said.

He said: “The UK’s interests are congruent with the interests of the EU. Therefore, the closer we are to the development of the initiatives around the European economy, European defence, the more it is in our interests.

“Some people would contest that. That’s absolutely fine and I know this is contested territory, but the risk is that if we don’t follow our European vocation, we find ourselves isolated in the world, less a…

Read the full article at The Independent
Source document: Bank of England (BoE)

5 reports

The IndependentIndependentCenter2 days ago
Brexit cost revealed as UK economy took 6% hit, Bank of England data shows

An analysis of Bank of England data suggests Brexit has caused at least a 6% loss in UK economic growth over the past decade, with estimates potentially reaching 8%. The decline is attributed partly to post-vote uncertainty and increased trade costs. Professor Nick Bloom notes the UK was growing rapidly before Brexit and could have matched U.S. growth rates if the referendum had resulted in remaining in the EU. Some analysts argue the data may not fully capture all economic impacts.

Bias read (Center): The article presents findings from multiple analyses without overtly favoring any political perspective. It includes quotes from both academic researchers and mentions differing opinions among analysts, maintaining a balanced approach to the economic implications of Brexit.

Official sources cited

BBC News (UK)State / PublicCenter2 days ago
Brexit cost 6% of UK economy, Bank of England company data suggests

A study analyzing Bank of England data suggests that Brexit has caused a 6% decline in the UK economy over the past decade. The research estimates that roughly half of this loss was due to the initial uncertainty following the referendum, while the other half resulted from increased trade barriers after leaving the EU's customs union and single market in 2021. Critics argue the study doesn't fully consider factors like the strong performance of U.S. tech sectors or the European energy crisis. Professor Nick Bloom, co-author of the study, stated that the UK could have maintained stronger growth

Bias read (Center): The article presents findings from an academic study and includes perspectives from both proponents and critics of the analysis. It avoids overtly biased language and provides balanced representation of different viewpoints without favoring any particular political stance.

Official sources cited

The IndependentIndependentCenter3 days ago
Brexit has cut trade in almost every sector of the UK economy, study warns

A study by the Centre for European Reform indicates that nearly all sectors of the UK economy have experienced a decline in trade following Brexit. Exports in chemicals, pharmaceuticals, and agrifood have dropped significantly. The report suggests that proposed solutions such as forming a new customs union with the EU would have limited effectiveness in reversing these losses. Researchers emphasize that returning to the EU single market could better enhance trade and economic growth.

Bias read (Center): The article presents findings from a research institution without overtly favoring any political stance. It reports data objectively and includes balanced perspectives on potential policy options without using biased language or selective sourcing.

Official sources cited

  • study Centre for European Reform Report
ReutersIndependentCenter4 days ago
How Brexit is estimated to have hit the UK economy

The article discusses economic analyses and estimates regarding the impact of Brexit on the United Kingdom's economy.

Bias read (Center): The article presents economic estimates without overtly favoring any political perspective. It focuses on analyzing the economic effects of Brexit through various studies and reports, maintaining a balanced approach by referencing multiple assessments.

The IndependentIndependentCenter7 days ago
‘Brexit is not done’: Civil servant who oversaw Britain’s exit from the EU calls for debate over rejoining the bloc

A former senior civil servant involved in the UK's Brexit process has urged politicians to reconsider Britain's relationship with the EU, suggesting that 'Brexit is not done.' He argues that global developments such as the Russian invasion of Ukraine and economic consequences of leaving the single market necessitate a new debate on whether the UK should rejoin the EU.

Bias read (Center): The article presents the views of a former civil servant without overtly favoring any political side. It includes direct quotes from the individual and references economic data from the Office for Budget Responsibility (OBR), providing balanced context without apparent ideological framing.

Official sources cited

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