British economy will be worse off under any Brexit scenario

The UK will be worse economically worse off under all possible Brexit scenarios in 15 years’ time, according to a benchmark economic analysis produced by a range of government departments including the Treasury.

The keenly anticipated document concludes that GDP would have been 0.6% lower under the Chequers plan in 2035-36 – although that has been ditched after a revolt from the Conservative right – and 7.7% lower in the event of the UK crashing out with no deal, when compared with the UK remaining in the European Union.

The Guardian reports that officials modelled every scenario across a range, comparing them in nominal terms. Under the worst-case, no-deal scenario, GDP would be 10.7% lower than if the UK had stayed in the EU in 15 years’ time, assuming there is no longer any net migration into the UK from the EU and European Economic Area (EEA) after Brexit.

Before publication of the analysis, the chancellor, Philip Hammond, said the UK would be worse off in the future after Brexit, saying: “If you look at this purely from an economic point of view, yes there will be a cost to leaving the European Union because there will be impediments to our trade.”

Meanwhile The Bank of England says that a disorderly Brexit could push the UK towards the biggest slump in modern memory.

It says that a disorderly Brexit, involving no new trade deals, severe disruption at borders and uncertain economic conditions, could lead to the British economy shrinking by nearly 8% – more than the effect of the financial crisis.

In an 88-page document, the bank also claims that a disorderly Brexit could lead to house prices falling by 30%, unemployment nearly doubling and inflation spiralling to 6.5%.