Update 1-Brexit will cost UK workers £470 a year, study predicts

* Study shows Britain is becoming a more closed economy

* One of the authors joins the Bank of England’s Monetary Policy Committee

* Govt says it’s working on reforms to boost growth (increase government response)

David Milliken

LONDON, June 22 (Reuters) – Britain is becoming a more closed economy due to Brexit, with long-term damaging effects on productivity and wages, with the average worker set to lose £470 ($577) a year by the end of the century. U.S. dollar), the research forecast on Wednesday.

The report was written by LSE Associate Professor Swati Dhingra (who will join the Bank of England’s Monetary Policy Committee in August) and researchers at the Resolution Foundation think tank.

The COVID-19 pandemic, which occurred shortly after the UK left the EU in January 2020, complicates the task of analysing the impact of Brexit.

Compared with the rest of the world, the new post-Brexit trade rules that came into effect in January 2021 have not led to a sustained decline in Britain’s trade with the EU, the researchers said.

“Rather, Brexit has had a wider impact by reducing the UK’s competitiveness and trade openness with the wider country. This will ultimately reduce productivity, as well as real wages for workers,” said Resolution Foundation economist Saw Fihale said.

Responding to the report, the UK government said it was working on new legislation to boost growth and that trade with the EU was now above pre-pandemic levels.

“Since we left the EU, we have started to seize new opportunities to improve UK regulation of businesses and consumers through plans to increase competition and take advantage of new technologies,” a spokesman said.

The UK does not face tariffs on exports of EU goods, but there are greater regulatory barriers.

The net impact of these measures would reduce productivity across the economy by 1.3% by 2030 compared with maintaining the same trade relationship – meaning annual wages per worker would actually fall by 1.8% to £470, the report said.

These figures do not include any assessment of the impact of the changed migration rules.

The impact on certain industries will be more pronounced. Britain’s small but high-profile fisheries – many of which are strongly pro-Brexit – could shrink by 30% as it struggles to export fresh catch to EU customers, the report said.

By contrast, while highly regulated professional services such as finance, insurance and legal will struggle to serve EU clients, their share of the UK economy could fall by just 0.3 percentage points to 20.2%. ($1 = £0.8151) (Reporting by David Milliken, Editing by Angus MacSwan and Andrew Heavens)

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