Brexit economic fallout leads to USD34B reduction in trade with EU in 2 years
Date
12/19/2024 7:28:42 AM
(MENAFN) The economic fallout from Brexit has led to a £27 billion (USD34 billion) reduction in trade with the EU during the first two years following Britain's departure, according to a comprehensive review conducted by the London School of Economics (LSE). This study highlights the significant challenges faced by small businesses, which have been hit particularly hard by the new trade barriers. Although the overall impact on trade was less severe than some earlier forecasts had suggested, the report paints a picture of considerable disruption for many firms.
The LSE’s Centre for Economic Performance (CEP) described the introduction of trade barriers as a "disaster" for small businesses, many of which were forced to halt trade with EU countries due to the complexities of new regulations. Smaller enterprises, in particular, have struggled to adapt to the increased administrative burdens and logistical hurdles, as they often lack the resources to navigate these changes effectively. This has led to a significant decline in their ability to do business internationally.
According to the study, which analyzed data from over 100,000 firms, by the end of 2022, British exports had dropped by 6.4 percent and imports had fallen by 3.1 percent. These figures provide a snapshot of the economic toll that Brexit has had on trade within the first two years of the Trade and Cooperation Agreement (TCA) with the EU. While these reductions are notable, the impact was less severe than the Office for Budget Responsibility (OBR) had initially projected.
The authors of the study, including Thomas Sampson, noted that the TCA's immediate impact was milder than expected, with trade reductions less than half of the OBR's long-term forecast. However, they cautioned that the future could bring more significant economic disruptions as the long-term effects of Brexit become more apparent. The study suggests that while the initial consequences were less dramatic than anticipated, ongoing challenges could lead to deeper economic consequences in the coming years.
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