Another morning, another story of Britain’s impending economic collapse.
The news cycle has been dominated by a report, published by Beezfeed, that the UK will be worse off after Brexit.
So you get to publish the conclusions without us getting to see the assumptions they are based on? How very very convenient.
— Verster (@verster) 29 January 2018
Much worse, we will be worse off under almost every contingency post-Brexit.
According to Buzzfeed, the leaked document was titled EU Exit Analysis – Cross Whitehall Briefing and drawn up for the Department for Exiting the EU.
It suggests UK economic growth would be 8% lower than current forecasts, in the years ahead, if the country left the bloc with no deal and reverted to World Trade Organisation rules.
The British government’s Brexit impact assessments have been leaked to BuzzFeed and say the UK will be worse off outside the EU in every scenario https://t.co/WxhmAHHtcJ
— Siobhán Fenton (@SiobhanFenton) 29 January 2018
It says growth would be 5% lower if Britain negotiated a free trade deal and 2% lower even if the UK were to continue to adhere to the rules of the single market.
So, what do we really know?
Firstly, this report is not finished. It has been selectively leaked and offers rather rigid analysis.
For instance a government spokesperson, drowned out by the chorus of bad news, has pointed out that the report doesn’t account for the ‘bespoke trade agreements’ which are currently being negotiated.
The spokesperson told The Times: “The document has not modelled the effect of a bespoke deal covering trade and financial services – the government’s preferred scenario – and it does not attempt to anticipate the outcome of negotiations.”
In short, the paper is responding to scenarios that the government is not pursuing.
— BBC Radio 4 Today (@BBCr4today) 30 January 2018
What is the economic picture?
Lots of reports in the build up to the referendum were wrong.
The chancellor promised 800,000 jobs would vanish.
— Marcus (@MayfairMarcus) 29 August 2017
The prime minister spoke of world war three.
Johnson promised 350 million-a-week to the NHS.
“If they used the same type of gravity models that the Treasury used prior to Brexit, those were comprehensively wrong” – @Jacob_Rees_Mogg on the government’s Brexit impact assessment as seen by BuzzFeed News #newsnight pic.twitter.com/yL4C5TN3jj
— BBC Newsnight (@BBCNewsnight) 29 January 2018
The top unbelievable reasons why we’re probably not doomed that you won’t believe…
To avoid further speculation, it may be worth focusing on what we do know about the state of the economy, some18 months after the Brexit vote:
- Employment rate is at lowest level in 44 years
- Wages have picked up, on average, to 2.4 percent.
- Inflation is still higher than wage increase, but the gap is narrowing at a rate quicker than forecasted.
- UK growth saw a slightly better-than-expected 0.5% rise for the last three months of 2017, official figures say.
- Tom Scholar, the Permanent Secretary of HM Treasury, confirmed on Wednesday that forecasts of a big hit to the economy from Brexit, made shortly before the June 2016 EU membership referendum, are no longer applicable.