Economic analysis of the fallout from Brexit shows EU countries have largely been able to absorb the shock – while Britain has suffered from a slump in trade and higher prices.
Writing in the Guardian, LSE’s Lorenzo Codogno said there has been “substantial” negative downsides for the UK, which has seen its share of world trade fall by 15 per cent compared to pre-referendum projections.
The EU, conversely, has been able to shoulder the impact and, in fact, has often benefitted from Brexit, especially in regards to the supply of labour, which has turned into a positive supply-side phenomenon.
It has also made up lost ground in the financial markets as many firms relocate services to continental Europe.
Visions of a “low-tax environment” in the UK akin to Singapore have failed to materialise due to the need to increase the public purse to cover spending on healthcare, infrastructure investments and the “various electoral promises” which point to tax increases.
While historically the Eurosceptic wing of the Conservative party wanted Brexit to deliver more freedom from what was perceived as the unnecessary constraints and bureaucratic burdens imposed by Brussels, the policies in the UK and the EU “increasingly look alike”, Codogno notes.
Adding that the economic effects of the pandemic will have to subside before the impact of Brexit can be fully accounted for, he concludes that “of the many problems the EU is currently facing, Brexit has happily receded from the foreground.”
The same, regrettably, cannot be said for the UK.