World

Brexit has cost Britain nearly 2.5% of GDP: Goldman Sachs

Reuters LONDON | Updated on April 01, 2019 Published on April 01, 2019

In a no-deal Brexit, Britain would see large output losses.   -  Getty Images/iStockphoto

Uncertainty has been a major driver of economic output losses

Goldman Sachs on Monday estimated Britain's economy has lost nearly 2.5 per cent of GDP relative to its growth path prior to the mid-2016 referendum on exiting the European Union, and has lagged other advanced economies as uncertainty dents investment.

“Politicians in the UK are still struggling to deliver on that vote,” Goldman Sachs economists wrote in a note to clients. “The resulting uncertainty over the future political and economic relationship with the EU has had real costs for the UK economy, which have spilled over to other economies.”

The US bank said Brexit uncertainty has been a major driver of economic output losses as they are concentrated in investment. “Uncertainty shocks weighed on investment growth in the immediate aftermath of the Brexit vote, as well as more recently amid the renewed intensification of Brexit uncertainty,” the economists said.

Their model finds the Brexit cost stood at around 600 million pounds ($785 million) per week since the referendum. In a no-deal Brexit, a scenario Goldman sees a 15 per cent chance of, Britain would see large output losses with a ”substantial” global confidence shock marked by sharp sterling depreciation.

European countries would be most exposed to this scenario, the economists estimated, and could see output losses of around 1 per cent of real GDP. ($1 = 0.7641 pounds)

Published on April 01, 2019

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Sincerely,

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.