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Industry News: Brexit has Slowed UK’s Economic Growth

By July 2, 2018June 30th, 2020No Comments
Industry News: Brexit has Slowed UK's Economic Growth

Two years after its Brexit vote, there’s still much uncertainty concerning Britain’s path forward without European Union membership. Around the time of the vote, there was no shortage of speculation about how the UK would fare after leaving the EU. But two years later, the realities of the vote are beginning to surface. A recent study has found that the UK’s economic growth has slowed by a cumulative 2.1% as of Q1 of 2018. This is compared to probable results had the UK voted to remain in the EU. The same study revealed that the vote to leave the EU costs the British government £440 million per week in lost tax revenue.

No Money Saved by Brexit Vote, OBR says

The UK’s Office for Budget Responsibility recently stated that, had the UK voted to stay in the EU, spending would have remained the same up until 2023. It will cost the UK just as much to leave as it would have cost it to remain a part of the EU. Its “divorce bill” from the EU remains in line with the OBR’s documents that revealed London will owe Brussels roughly £37.1 billion. The UK could, however, be making payments to Brussels until 2064.

UK Businesses Pessimistic About Brexit

Seventy-five percent of major British companies now have a pessimistic view of how Brexit will impact the British economy, according to Deloitte’s quarterly CFO Survey. The survey found that CFOs’ concerns about Brexit were up seven percentage points from the last report, published in April of this year. The most recent survey found that Brexit has returned as one of the primary concerns shared among some of the UK’s largest companies. Skills shortages and recruitment worries are also on the rise.

European Aerospace Economic Output in Question

The UK will face new costs associated with doing business with its soon-to-be-former Member States. A study conducted by Oliver Wyman found that the UK’s tariff and non-tariff costs could surpass $35 billion across all industries. But for the aerospace industry in particular, the loss could be as much as $3 billion annually. Aerospace is within the top five industries in both the UK and EU that will be heavily affected by Brexit. The news comes at a time when Airbus and Siemens noted that their British investments could be at risk should the UK not have a deal in place by its March 29, 2019 deadline.