UK Brexit Vote Consequences: Economists Argue For Higher Economic Growth Outside EU After Leave Decision
As Britons prepare to vote on whether the U.K. should remain in the European Union or split off, the most commonly cited argument for staying in the EU may have been an economic one. Critics have contended a so-called British exit, or Brexit, would gravely jeopardize the U.K. economy.
Thursday, however, a group of eight notable economists aligned with the campaign to scuttle Britain’s EU membership attempted to change that impression. In an announcement, the group presented arguments that the split would grow the economy by 4 percent, compared with the alternative of staying in the EU.
By abandoning the EU’s external tariffs and using instead the tariff levels offered by the World Trade Organization, the U.K. could see consumer prices fall by 8 percent, said Patrick Minford, professor of applied economics at the Cardiff Business School in Wales.
Trade arguments have typically been a central concern of economists who oppose a Brexit. Leaving the EU would force Britain to sign more than a hundred new trade agreements with countries around the world, they have contended, a point underscored by U.S. President Barack Obama’s recent warning that the U.K. would fall to the back of the line in trade talks in the event it left the union.
But Minford waved off such arguments. “There is no need for us to go off chasing a million trade deals with the rest of the world,” he said. “They are irrelevant.”
That opinion — and the broader argument that the British economy would benefit from a Brexit — flies in the face of what the wider economic community has said the past several months. In a Reuters poll conducted this month, an overwhelming majority of economists said a vote to leave the EU would damage the U.K. economy.
“Both the U.K. and Europe risk a fall into recession in the following quarters due to the increased uncertainty,” Mikael Milhøj, analyst at Danske Bank headquartered in Copenhagen, Denmark, told Reuters. “One has to take into account that the U.K. is the second-largest economy in the EU, so this is a big deal.”
A referendum on the proposed Brexit is scheduled June 23.