The Consequences of Brexit
The UK and the EU agreed on a trade pact at the last minute of the last year. The analysis shows that without an agreement the kingdom’s economic future would look grim.
Experts expect significantly fewer exports from Great Britain to the EU in the medium term after Brexit. “Brexit will lead to new trade barriers between Great Britain and the EU, which will lead to a lower volume of trade and thus to a loss of income due to higher prices and less efficient production,” writes Thomas Sampson of the London School of Economics in the “Beyond Brexit” report published by think tank “UK in a Changing Europe”.
“Brexit is likely to make the UK poorer in the long term than if it had remained a member of the EU,” said Sampson. After all, the expected exports at this point in time are likely to be more than 10 percent above the volume that had been calculated for a Brexit without a trade pact with the EU.
Overall, ten years after Brexit, the experts expect around 13 percent less trade volume between Great Britain and the EU than before – but four percent more than in the no-deal scenario. However, such forecasts should be viewed with caution, as much is still unclear. For example, which sectors will be hit particularly hard by Brexit, how the exit from the EU will affect productivity in the country and how the economy will recover and rebuild after the corona pandemic.
The trade pact concluded at the last minute between London and Brussels
In 2019, shortly before Brexit, 43 percent of British exports went to the EU, while 51 percent of imports to Great Britain came from the EU. The trade pact concluded at the last minute between London and Brussels allows both sides to have duty-free access to each other’s markets, but it still brings with it trade hurdles – such as costly border controls and other formalities.