The figures being cited by the Frontier Economics would mean the UK would recover between a quarter and a half of Brexit’s economic hit to UK GDP
With sluggish economic growth continuing, and with Trump set to engage in a trade war which would only serve to further undermine the UK’s economic performance, many have been pressing the government to adopt closer alignment with the EU to off-set any economic hit.
Now new data has emerged showing that closer alignment with the European bloc could mean an economic boost worth £26bn to the economy, even without joining the customs union or single market.
The research, carried out by Frontier Economics for the campaign group Best for Britain has found that an economic boost of $32.9bn – or roughly £26.5bn – could boost the country’s GDP by more than 2%.
The report states that deeper alignment with the EU would benefit the UK more compared to other neighbouring European countries.
It states: “Deep regulatory alignment in goods and services delivers the strongest results for UK trade. Deep alignment has a bigger effect on goods than it does on services, likely reflecting the extent of other remaining barriers to services trade. Again the effects are bigger for the UK than the EU.
“Deep alignment in goods and services further mitigates the impact of US tariffs. The mitigating impact is larger for the UK than it is for the EU.”
The figures being cited by the Frontier Economics would mean the UK would recover between a quarter and a half of Brexit’s economic hit to UK GDP, which the Office for Budget Responsibility (OBR) has calculated at minus 4 per cent by 2030.
The Labour government has pledged that the UK will not re-join the EU single market or customs union, or sign up to freedom of movement.
However, ministers have been pushing for a better relationship on defence and security, crime and trade. They hope to reach a deal at a UK-EU summit in the UK on May 19.
The research comes at a time when a YouGov poll found that just three in ten Britons (30%) now say that it was right for the UK to vote to leave the EU, compared to 55% who say it was wrong for the country to vote for Brexit in 2016.
Basit Mahmood is editor of Left Foot Forward
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