NIESR: Boris’s Brexit deal more damaging than further delay
Thinktank forecasts Boris’s Brexit will shrink Britain’s economy by 3.5pc
The National Institute of Economic and Social Research (NIESR) has stated that continued Brexit uncertainty is preferable to the passage of prime minister Boris Johnson’s withdrawal agreement into international law.
Arno Hantzche, an NIESR economist dismissed the possibility of a “deal dividend” observing that “a deal would reduce the risk of a disorderly Brexit outcome but eliminate the possibility of a closer economic relationship.”
The NIESR is one of Britain's oldest economic research institutes, and is based in London. It was a founding member of the EUROFRAME network, an initiative founded in 1998 to provide analysis forecasts and policy proposals for the European Union and its member states.
The thinktank emphasised the impact that tariffs and other trade barriers would have on the British economy, estimating it would be 3.5 per cent smaller under Mr Johnson’s Brexit plan than if it Britain stay in the EU. It forecast that the UK’s economy would be 5.6 per cent smaller under a ‘no-deal’ WTO Brexit and 3.0 per cent smaller under Theresa May’s previous deal.
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In the short term, NIESR recommended the Bank of England to cut interest rates next week by 0.25 per cent to 0.5 per cent. This would be in line with other major central banks, chairman of the Federal Reserve Jerome Powell is expected to lower rates by the same amount this afternoon.
The NIESR’s report comes a day after the House of Commons voted in favour of a general election at the fourth time of asking. Mr Johnson stated that his deal is the only way to break the current deadlock, while his opposite number Jeremy Corbyn has promised to negotiate a new deal and put it to the public in a second referendum.