The impact of Brexit will be “worse than Covid”, according to British budget body

Brexit will be long more impact than pandemic of Covid-19 on the British economy, Richard Hughes, chairman of the public budget forecasting body OBR, said in an interview BBC .

United Kingdom leaving the European Union Long-term GDP will shrink by about 4% while the pandemic will bring it down an additional 2% According to Office for Budget Responsibility (OBR) estimates, Hughes said.

The organization has raised its growth forecast for this year from 4% to 6.5%, and revised its estimate of the pandemic’s long-term impact on gross domestic product (GDP) to 2%, from 3% earlier.

“Development at half mast”

Over time, it will become difficult to separate the effects of the pandemic from other factors, such as Brexit., in its report warned OBR.

Chancellor of the Exchequer Rishi Sunak reacts to BBC, arguing that Brexit made some reforms possible which would not have been possible to be in the European Union, for example, citing an overhaul of alcohol taxes announced a day earlier as part of the budget.

But for IFS Research Center Despite the Chancellor’s optimistic speechesThe standard of living of the British would be really affected by High inflation, rising taxes and sluggish growth, undermined more by Brexit than by pandemic.

labor shortage

Despite a trade agreement between the EU and the UK, trade in goods between the island and the mainland has declined since the effective entry of Brexit.

Britain’s exit from the European Union has also greatly complicated the entry of European workers into the UK, leading to labor shortages and supply chain disruptions in the country.

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The resumption of economic activity in the world after the lifting of many health measures in the event of a pandemic is also leading to peak in demand and congestion of ports or sea transport capabilities.

“Permanent growth in the odds”

According to Jonathan Ports, professor of economics at King’s College, the fact that the impact of Brexit on GDP is greater than that of the pandemic is not surprising.

Covid was a huge blow in the short term But the economy is unlikely to suffer in the long run, while Brexit There is a permanent increase in barriers to trade and labor mobility, he explains.

In its forecast for Wednesday, the OBR forecast a return to pre-pandemic levels of economic activity in early 2022, although growth will slow to 6% next year.

Recovery is indeed showing signs of slowing in the United Kingdom, punished by labor shortages, rising energy prices, supply problems, not to mention high levels of new cases of Covid-19.

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