Resolution Foundation: It will take many years for the British economy to recover from Brexit

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It will take many years for the British economy to fully adapt to concequenses of Brexitwhich will be borne in the long run in household purchasing powerwarns study center Resolution Foundation.

The publication of the new study coincides with today’s announcement by the British Statistical Institute (ONS) of a new rise in inflation that feeds a serious crisis of the cost of living in the country.

The trade agreement reached with the European Union and governing post-Brexit trade relations has the effect of “reducing household incomes” due to “the weakness of the pound and the reduction of investment and trade”, the study explains.

“Immediately after the referendum, Brexit helped increase the cost of living and reduce investment by businesses,” the study found.

And over the next decade, the country “will have 1.3% lower productivity” compared to the Brexit-free scenario, while wages in real terms, adjusted for the effects of inflation, “will fall by 70 470” per capita per year “.

Since the entry into force of Brexit on 1 January 2021, “the biggest change in the UK’s relations with the rest of the world in the last half century”, the exit from the European Union “seems to burden the opening and competitiveness” of the British economy, according to a study by the Resolution Foundation.

But if the UK saw its share of imports from the Union decline, the country maintained its share of exports to the European continent.

British companies have had to adapt: ​​”given the extra procedures”, British companies sometimes choose to “send products directly to individual EU countries and use distributors in the Union, rather than exporting directly to smaller markets”.

“Trade barriers will increase more in the agricultural sector and services – and especially in the more regulated professional services – than in the manufacturing industry,” the study predicts.

“This is bad news for UK exports, as 20% of service exports to the EU belong to the highly regulated financial and insurance services category,” the Resolution Foundation study said.

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