Brexit shows the need for EU reform

Last week I looked at the potential impact of Brexit on the UK economy and concluded that in the short term it would be very negative for the economy, but the longer-term impact would depend on what sort of trade deal the EU would agree with Britain.

The short-term negative impact is playing out already.

GDP growth slowed to just 0.4% in the first quarter of 2016 and the year-on-year growth rate declined to 2.1%, which compares to 2.6% a year ago.