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London Mayor Sadiq Khan, a vocal critic of Brexit, claims that Britain’s departure from the European Union has already shrunk its economy by 6%, equating to a staggering annual cost of £140 billion ($178 billion).
According to a report commissioned by Khan from economic consultants Cambridge Econometrics, the negative impact is anticipated to rise to 10% by 2035.
In remarks released before a scheduled speech, Khan expressed concern that the “hard-line version of Brexit” is not delivering the expected economic benefits and is contributing to a rising cost of living.
The Labour Party member’s assessment is framed against an impending election where Labour currently holds a substantial lead over Prime Minister Rishi Sunak’s Conservatives.
Despite Labour’s strong position in the polls, party leader Keir Starmer has been cautious about revealing specific plans to strengthen ties with the EU.
The economic repercussions of Brexit are central to the political discourse, and different estimates provide varying perspectives on the extent of its impact.
Cambridge Econometrics’ evaluation, cited by Khan, suggests a more significant economic impact than other estimates.
The National Institute of Economic and Social Research (NIESR) previously estimated a 2%-3% reduction in the economy’s size due to Brexit, with projections indicating a rise to 5%-6% by 2035.
Bank of England policymaker Jonathan Haskel’s private estimate indicated a 1.3% GDP reduction by the end of 2022.
Cambridge Econometrics projects an annual reduction of 0.4 percentage points in economic growth between now and 2035, anticipating a decline in employment levels by 3 million and a one-third reduction in investment.
The long-term consequences of Brexit are further complicated by the concurrent challenges posed by the COVID-19 pandemic.
The report notes that net migration to Britain has surged, influenced by a new work visa system that increased immigration from outside the EU.
This influx has outweighed the decline in EU immigrants, who were no longer exempt from visa requirements.
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