Econmic effects of Brexit The economic effects of

Econmic effects of Brexit

The economic effects of Brexit were a major area of debate during the Referendum on UK membership of the European Union, and the debate continues after the Leave vote. There is a broad consensus among economists and in the economic literature that Brexit will likely reduce the UK's real per-capital income level. Supporters of remaining, including the UK treasury, argued that being in the EU has a strong positive effect on trade and as a result the UK's trade would be worse off if it left the EU. Supporters of withdrawal from the EU have argued that the cessation of net contributions to the EU would allow for some cuts to taxes or increase in government spending.

Contributions to the EU Supporters of withdrawal argued that ending net contributions to the EU would allow for tax cuts or government spending increases. The Institute for Fiscal Studies noted that the majority of forecasts of the impact of Brexit on the UK economy indicated that the government would have less money to spend even if it no longer had to pay into the EU.

Single market According to Paul Krugman, Brexiteers assertions suggesting that leaving the single market and customs union might increase UK export more to the rest of the world are wrong. He considers the costs of Brexit might be of around 2 per cent of GDP.

Effect on trade and the economy Most economists, including the UK Treasury, argue that being in the EU has a strong positive effect on trade and as a result the UK's trade would be worse off if it left the EU. Surveys of leading economists show overwhelming agreement that Brexit will likely reduce the UK's real per-capita income level. A 2017 survey of existing academic literature found "the research literature displays a broad consensus that in the long run Brexit will make the United Kingdom poorer because it will create new barriers to trade, foreign direct investment, and immigration.

Property market The BBC reported on 28 April 2017 that property investment firm JLL (company) data shows Asian investors accounted for 28% of the transactions in the UK property market in 2016, up from the 17% the year before indicating that Brexit is not dissuading Asian property investors. The BBC also cited Chinese international property portal Juwai. com, which reported a 60% increase in enquiries into UK property in the prior 12 months. Property firm CBRE Group said in January 2017 that Brexit has increased risk in UK property markets by creating new uncertainties.