It has been 5 years since the Brexit referendum. So what are the real benefits/costs of Brexit? Experts estimate that instead of the £350m-a-week promised in the Leave the Vote campaign in the UK budget, there is £800m less a-week.
‘We send £350m a week to the EU. Instead, let’s finance the NHS’ – that was one of the key slogans of the Leave the UK’s Vote to Leave the EU campaign. The best-remembered slogan from that period that prompted millions of people to vote to leave the structures of society. And how much of that mantra is left 5 years after Brexit? Has the UK really gotten its money back and is now £350m a week richer? Many experts have no doubt that the earnings from EU membership have been much greater than The fact that the UK contributed more to the budget of the group than it received directly from it.Above all, the UK gained a lot of opportunities to trade freely with the countries of the European Union.
Costs of the UK leaving the EU
Some experts say that the UK began to record losses related to leaving the European Union on the first day after the referendum, because at that time sterling fell strongly (on June 23-27, 2016, the pound fell by 11% against the dollar and 8% against the dollar euro). Analysts from the London School of Economics found that as a result of this record decline in the value of the British currency, consumer prices in the United Kingdom rose by 2.9 percentage points. In the two years following the referendum, which translated into an increase in the cost of living for the average British family by £870 a year. Another immediate consequence of the UK’s vote to leave the European Union was a significant drop in business investment. Several companies canceled their plans to expand into the UK at this time due to confusion over future trade relations between the UK and the EU. According to estimates, if investments in the UK had not slowed down as a result of Brexit, it would have reached 10% by the end of 2019. Higher than it already was. The University of Sussex’s UK Trade Policy Monitor 2018 analysis shows that the Brexit referendum result reduced the number of foreign investment projects in the UK by 16-20%.
How much does the UK really lose when it leaves the EU?
Various types of comparative analyzes, in which the economic growth of the United Kingdom has been compared to the economic performance of the world’s leading economies (including France, Germany, Canada and the United States), show that Great Britain has much to lose by leaving society. The analyzes mainly took into account two factors – fewer foreign investments in the UK and an increase in household spending, which was the result of the depreciation of the pound. Experts estimated that by the end of 2019, Brexit had cost 1-2 per cent. GDP per year, i.e. from 20 billion pounds to 40 billion pounds annually. This, in terms given by the Leave Voting website during the referendum campaign, means a loss of between £400m and £800m a week.
In contrast, research by the Research Center for European Reform showed that Brexit reduced the export of goods from Great Britain by 11%, i.e. caused losses of 7.7 billion pounds. While the government says the new free trade agreements will bring great benefits to the UK, many experts add, they will not replace the UK’s ability to trade freely with the community – Britain’s largest trading partner. Almost all economists expect a further slowdown in economic growth as trade with the EU becomes more expensive. Business models suggest that the economy could take up to a decade to fully adjust to Brexit, notes Thomas Sampson of the London School of Economics.
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