Global trade will be affected if the United Kingdom decides to withdraw from the European Union (Brexit), warns the Economist Intelligence Unit.
It says weaker trade ties would exacerbate a decline in gross domestic product from 2018 onwards.
In real terms the UK economy would be 6% — or £106bn — worse off in 2020 than it would if it had not left the EU, according to the latest report from the Economist Intelligence Unit (EIU), “Out and down: Mapping the impact of Brexit”.
The report, which explores a potential post-Brexit landscape and its impact on key industrial sectors, suggests that the impact on specific UK industries would vary by sector and would be largely negative.
Other findings include:
- The uncertainty caused by a “Leave” vote would upset consumer and market sentiment, causing a 14-15% devaluation of the pound against the US dollar.
- Delayed investment and spending decisions would hit real GDP growth most in 2017.
- Pharmaceutical exports, access to medicines and research grants could all be at risk. Any economic downturn would also affect NHS funding.
- London’s financial sector also could experience a “brain drain”, as European nationals return home.
