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Pro-Leave the EU protesters hold flags and placards in London, Saturday, October 19, 2019. © Luke MacGregor/Bloomberg
The UK economy has suffered since Brexit, according to Goldman Sachs. A decline in international trade and weak business investment are just some of the reasons.
(Bloomberg) -- The United Kingdom's decision to leave the European Union has shrunk the British economy by reducing growth and boosting inflation, according to economists at Goldman Sachs Group Inc., who have tracked the country's performance since compared with similar nations following the 2016 referendum.
The U.K.'s real GDP fell by about 5%, Sven Jari Stehn and his colleagues said in a research report published Friday.
Lower international trade, weak business investment and a decline in immigration from Britain's largest trading partner have contributed, researchers said.
“Significant long-term production costs of Brexit”
“The evidence suggests significant long-term production costs of Brexit,” they write.
“The UK has performed significantly worse than other advanced economies since the 2016 EU referendum.”
Goldman's conclusion is broadly consistent with other estimates of the impact of Brexit.
The UK's official fiscal watchdog, the Office for Budget Responsibility, said last year that Britain's exit from the EU was likely to reduce economic output by 4%.
The Bank of England's Jonathan Haskel said a year ago that Brexit had cost every British household an average of 1,000 pounds ($1,260).
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Not all of Britain's economic problems are due to Brexit
Prime Minister Rishi Sunak has struggled to deliver on his promise to strengthen the economy since taking office at the end of 2022.
Economists are divided over whether this week's data will show the UK slipped into a technical recession late last year.
Still, Goldman said not all of the U.K.'s economic woes are due to Brexit, citing the pandemic and the energy crisis following Russia's invasion of Ukraine as weighing heavily on growth.
Some economists, particularly those more supportive of the decision to leave the EU, have argued against using the so-called doppelganger approach to analyzing the impact of Brexit.
Like the British government, they point out that the UK's real GDP has outperformed that of Germany and Italy since the referendum.
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By Joe Easton with assistance from Philip Aldrick and Andrew Atkinson.
We are currently testing machine translations. This article was automatically translated from English into German.
This article was first published in English on February 12, 2024 at the “Washingtonpost.com” - as part of a cooperation, it is now also available in translation to readers of the IPPEN.MEDIA portals.