Amid all the announcements today, it's easy to overlook that the OBR has updated its scenario on a no-deal Brexit. It exposes an undeniably hard reality for the Govt that claims that the UK would "prosper mightily" under no-deal next year.

(Short thread)

1. Key chart: a no-deal/WTO/Australia-style Brexit would delay the point at which econ output regains its pre-virus peak by "almost a year to the third quarter of 2023."

In the upside scenario, this cross-over point could be at the start of 2022; in the downside, in 2025. Grim.
2. Next year, a no deal Brexit would reduce real GDP by around a further 2% - as a result of immediate disruption to the border and uncertainty facing businesses. That's on top of the Covid-related contraction.
3. While there's some short-term border disruption, most of the costs come in the medium term: from lost employment; productivity losses; lower business investment.

Exactly the opposite of what the Chancellor said to @AndrewMarr9 on Sunday. https://t.co/2FEroyGUwL
4. Underneath these numbers, output would fall *below* the Covid levels for several key sectors: Manufacturing, professional services, financial services, retail, energy.

All trade intensive sectors that have been spared the same drop in output as the non-tradables this year.
5. Crucially, the OBR notes, no-deal would have additive effects to the hit by Covid, not replace it (contrary to the popular, but non-sensical narrative in Govt recently). It's a recipe for screwing the outward-facing side of the economy - which has been its engine during Covid
6. Under no-deal, the OBR also expect the inflation to rise by 1% next year - caused by new tariffs and regulatory and customs barriers with the EU.
7. The unemployment numbers are also expected to rise up to 8.3% next year (under the central scenario).
8. By the way, these numbers assume that the lockdown ends on 2 Dec; the test-and-trace system is "partly effective" and the vaccination programme begins next year with "medium-high" success rate. A lot of big assumptions.
9. If there's one undeniable fact from the OBR figures, it's that the UK will not "prosper mightily" under no-deal, as the Prime Minister likes to claim.

It'd be more than an act of self-harm to not agree a trade deal with the EU. It would be a full-blown economic suicide

(End)

More from Brexit

You May Also Like

Fake chats claiming to be from the Irish African community are being disseminated by the far right in order to suggest that violence is imminent from #BLM supporters. This is straight out of the QAnon and Proud Boys playbook. Spread the word. Protest safely. #georgenkencho


There is co-ordination across the far right in Ireland now to stir both left and right in the hopes of creating a race war. Think critically! Fascists see the tragic killing of #georgenkencho, the grief of his community and pending investigation as a flashpoint for action.


Across Telegram, Twitter and Facebook disinformation is being peddled on the back of these tragic events. From false photographs to the tactics ofwhite supremacy, the far right is clumsily trying to drive hate against minority groups and figureheads.


Declan Ganley’s Burkean group and the incel wing of National Party (Gearóid Murphy, Mick O’Keeffe & Co.) as well as all the usuals are concerted in their efforts to demonstrate their white supremacist cred. The quiet parts are today being said out loud.


The best thing you can do is challenge disinformation and report posts where engagement isn’t appropriate. Many of these are blatantly racist posts designed to drive recruitment to NP and other Nationalist groups. By all means protest but stay safe.