THE impact of Brexit on the British economy may be uncertain, but a new report has cast doubt on the claim that the country’s long-term economic outlook hinges on it.
In the report for Woodford Investment Management, Capital Economics said there were more important issues now than there were when we joined the EU in 1973.
It said the shortfall in productivity was still more than 10 per cent relative to its trend before the financial crash, so regaining that lost ground “would offset even the most negative of estimates of Brexit on the economy”.
Capital said: “It is plausible that Brexit could have a modest negative impact on growth and job creation. But it is slightly more plausible that the net impacts will be modestly positive.” It said there were “potential net benefits” surrounding a more “tailored immigration policy, the freedom to make trade deals, moderately lower levels of regulation and savings to the public purse”.
The report added: “In each of these areas, we do not believe that the benefits of Brexit would be huge, but they are likely to be positive.”
Capital said it continued to think that the UK’s economic prospects were good, either inside or outside the EU.
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