UK economy haemorrhaging £600m a week because of Brexit – Goldman Sachs

Brexit has cost the British economy £600m a week since the referendum, and the shock of a no-deal divorce could hammer the country even harder.

A new report published by investment banking giant Goldman Sachs suggests that since the June 2016 vote, nearly 2.5% has been shaved off GDP.

It argues that had UK voters opted to remain, the economy would have been in a much stronger position, instead of underperforming and lagging behind other advanced economies.

Goldman’s number crunchers concluded that investment has been one of the biggest casualties of the Brexit debacle, confirming official data which has shown it in decline.

“The component-level breakdown reveals that output losses have been concentrated in investment and private consumption.

“The outsized impact on investment suggests that political uncertainty associated with the Brexit process may, indeed, be one of the major sources of the economic cost of Brexit,” the report read.

The report echoes a Bank of England analysis that suggested around £40bn per year, or £800m per week, of lost income for the country as a whole since the result of the leave vote.

It comes as MPs remain in deadlock over Britain’s divorce terms, with a series of indicative votes due this evening that aim to chart the course of the nation’s EU exit.

Goldman added that under a no-deal scenario, favoured by the most extreme Tory Brexiters, the UK will be a big loser, but its European neighbours would also suffer.

It said: “Under our ‘no-deal’ scenario, the UK suffers large output losses, in conjunction with a substantial global confidence shock marked by a sharp sterling depreciation. European countries would be most exposed to this scenario and could see output losses of around 1% of real GDP.”

Conversely, a “status quo” Brexit transition deal would reverse part of the UK’s output underperformance and, under a remain scenario, the UK “fully recoups Brexit-related output costs and business confidence rebounds”.

- Press Association

More on this topic

Theresa May’s future: What happens now?

‘Mrs May must go’: What the papers say on PM’s future

Update: Andrea Leadsom resigns; Theresa May disagrees with her on Brexit approach

Theresa May’s future: What happens now?

More in this Section

Diageo to give new fathers 26 weeks paternity leave

China cuts taxes to encourage chip makers in face of US pressure

String of firms that failed under controversial owner Greybull Capital

Greyhound Group set to create 100 new jobs


Lifestyle

Why you should go hug a tree

More From The Irish Examiner