Brexit May Cause U.K. Output to Fall 9.5%, MIT Study Shows

by Dramelin 3:00 AM 0 comments

Britain?s departure from the European Union could cause output losses of as much as 9.5 percent per person, according to new research. The Bank of England predicts growth will slow this year as the weaker pound fuels inflation and uncertainty over Brexit negotiations hinders investment. That?s because increased costs of doing business with the rest of Europe -- which accounts for about half of all U.K. trade -- will mean lower levels of commerce and foreign investment, and thus lower average incomes in Britain, he said. ?It seems unlikely that voters were fully aware of the magnitude of these costs at the time of the vote.?The U.K. economy has so far shown unexpected resilience following Britons? vote to leave the trading bloc. Calculations using models that incorporate productivity measures show a negative impact on gross domestic product per capita of almost four times that of previous estimates, according to professor John Van Reenen, who supported the campaign for the U.K. to remain in the EU.