Pandemic And Brexit Could Cause Great Losses To The British Economy

Pandemic And Brexit Could Cause Great Losses To The British Economy

The combination of the COVID-19 pandemic and the inability to secure a trade agreement with the European Union after Brexit could cause great losses to the British economy. The UK's gross domestic product (GDP) could lose about £ 134 billion (€ 147.78 billion) a year over the decade, according to a report by the US law firm Baker & McKenzie. The COVID-19 pandemic will reduce Britain's GDP by 2.2 percent compared to pre-outbreak levels, Baker & McKenzie said. In addition, Brexit, even with a trade agreement, will cut GDP by 3.1 percent in the long run compared to a hypothetical scenario in which the United Kingdom would remain part of the EU, while exports of goods will be lower by 6.3 percent. Without a trade agreement, the long-term cost of Brexit will rise to 3.9 percent of GDP. "Although companies are taking steps to offset the increased cost of Brexit by reconfiguring supply chains, UK manufacturers will see a significant decline in export sales," the Baker & McKenzie report said. "As the cost of Britain's exit from the EU is likely to be very high, the government will have to use all available means to help reduce its economic damage."