Cambridge Econometrics’ study ‘Preparing for Brexit’ for London Mayor Sadiq Khan represents a new insight into the local economic impact of the UK’s exit from the European Union.
Khan commissioned the report after the Brexit department had to admit that a raft of detailed studies they claimed to have made were useless.
The report is the first comprehensive assessment of Brexit across key indicators and sectors at a sub-national level reveals a spread of impacts under five different scenarios, ranging from a status quo (where the UK remains in the Single Market and Customs Union) to an extreme no-deal (WTO rules) outcome.
Sadiq Khan said, "This new analysis shows why the government should now change its approach and negotiate a deal that enables us to remain in both the single market and the customs union .It is thought that London will emerge relatively better than the rest of the UK because it has a higher concentration of high-value sectors, which are more resilient and able to recover from economic shocks more quickly. However, the results show that Brexit will not only reduce the size of the UK economy (compared to what may have happened if the UK remained in the single market and customs union), but also put it on a slower long-term growth trajectory (the economy is still expected to grow, but at a slower rate than if Brexit did not occur)."
The study adds a new dimension to existing studies and offers a valuable insight into the potential impact of Brexit on employment and output under a range of scenarios.
The modelling results show that Brexit will have a negative impact on the UK economy across all key indicators, in particular on investment.
London is expected to experience a loss of 30,500 people in employment under the softest scenario, rising to 87,000 under the hardest’ scenario, by 2030.
London financial and professional services could experience up to 119,000 fewer jobs nationally in 2030 than would otherwise be the case.