British government forecasts doomsday no-deal Brexit scenario | News | DW

The British government on Wednesday published a report that spelled out a devastating scenario for the economy if Britain leaves the European Union in March 2019 without a deal.

The report found that the economy would only be around 2 percent smaller in 15 years time if it exited the bloc under terms similar to the British-EU draft deal agreed to last week. In a no-deal Brexit, the economy would be nearly 8 percent smaller and could shrink by up to 9.3 percent in the event of significant trade barriers.

“If the only consideration, the only consideration, was the economy, then the analysis shows clearly remaining in the European Union would be a better outcome for the economy, but not by much,” British Treasury chief Philip Hammond told BBC earlier on Wednesday.

British pound notes

In every Brexit scenario, Britain’s economy will be worse off than if it stayed in the EU

May managed to secure support from the 27 other EU leaders for the draft deal on Sunday. But during the summit, EU leaders made clear that London could not secure a better deal than the one they agreed on. Some British lawmakers have threatened to undermine May’s deal, saying a better deal is possible.

Read more: What happened to Brexit architect David Cameron?

Greater economic impact

The government’s report, however, is seen as an optimistic assessment.

A study published on Monday by the independent National Institute of Economic and Social Research showed May’s deal having a stronger negative impact on the economy, citing costlier trade with the EU.

“GDP in the longer term will be around 4 percent lower than it would have been had the UK stayed in the EU,” the research institute said in its report. That difference translates to around 1,000 British pounds (€1,130, $1,270) per person annually, according to the report.

Read more: No-deal Brexit fears on minds of German manufacturers

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ls/amp (Reuters, AFP, AP)

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