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COVID-19 and no-deal Brexit could cost UK $174 bln a year – Baker & McKenzie

By: Reuters |

October 5, 2020 2:37:52 pm


Boris Johnson, British Prime Minister Boris Johnson speaks in a pre-recorded message which was performed throughout the 75th session of the United Nations Normal Meeting, Saturday, September 26, 2020, at UN Headquarters. (Photograph: UNTV Through AP )

The mixture of COVID-19 and a failure to safe a post-Brexit commerce cope with the European Union might value the UK round 134 billion kilos ($174 billion) every year in misplaced GDP for a decade, analysis by regulation agency Baker & McKenzie confirmed.

Prime Minister Boris Johnson has set Oct. 15 as a deadline for clinching a post-Brexit commerce deal which might kick in when the UK leaves casual EU membership on the finish of this 12 months.

The COVID-19 outbreak will lower Britain’s GDP by 2.2% beneath the degrees anticipated earlier than the outbreak, Baker & McKenzie stated in a report titled “The Way forward for UK Commerce: Merged Realities of Brexit and COVID-19.”

On high of that, Brexit, even with a commerce deal, would lower GDP by 3.1% within the long-run relative to a hypothetical situation the place the UK remained within the EU, whereas exports of products could be 6.3% decrease, Baker & McKenzie stated.

However with no commerce deal, the price of Brexit would enhance to three.9% of GDP in the long term, Baker & McKenzie stated.

“Regardless of companies taking steps to offset the added prices of Brexit by reconfiguring provide chains, the decline in export revenues for UK producers shall be substantial,” Baker & McKenzie stated.

“With the prices of the UK’s departure from the EU more likely to be very excessive, the federal government might want to use all of the instruments at its disposal to assist mitigate the financial harm.”

Opponents of Britain’s exit say Brexit will value the nation dearly in each cash and energy for many years to come back, although supporters say estimates of the financial affect have been overly pessimistic.

Supporters of Brexit say that whereas there shall be some brief time period prices, the long run financial and political advantages might far outweigh the prices as the UK could be free to form its personal priorities.

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