Economics of Brexit

LSE Continental Breakfast 5: Britain’s financial obligations to the EU

How much does Britain owe the EU? What are its legal obligations? Is the European Commission right to demand that the vexed issue of Britain’s ‘divorce bill’ is settled before trade talks can begin? Britain’s financial obligations to the EU were the subject of the fifth Continental Breakfast discussion at the LSE – held under Chatham House rules, so […]

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    UK households are already paying an average of £404pa for Brexit

UK households are already paying an average of £404pa for Brexit

On 23 June 2016, the UK voted to leave the EU. As soon as the result became clear, sterling depreciated sharply and, since the vote, UK inflation has dramatically increased. How much of the rise in inflation is due to the referendum? Holger Breinlich, Elsa Leromain, Dennis Novy, and Thomas Sampson, (LSE’s Centre for Economic Performance) find that the referendum result pushed up UK […]

Who will pick fruit and harvest vegetables after Brexit? Reviving SAWS could be a solution

British agriculture relies heavily on seasonal migrant labour, and much of this comes from the EU. Where will farmers turn to find workers after Britain leaves the EU – particularly if, as one cabinet minister has suggested, they come under pressure to grow more food for the domestic market and thereby keep prices down? Wyn Grant (University of Warwick) looks […]

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    Understanding the motivations of Leave voters will play an important role in determining the future of globalisation

Understanding the motivations of Leave voters will play an important role in determining the future of globalisation

Since World War II the global economy has become increasingly integrated. Brexit runs counter to this trend and has ignited a debate about the future of the EU and the global economy. In a recent paper, Thomas Sampson (LSE Centre for Economic Performance) discusses why the UK voted to leave and what this tells us about the future of globalisation. He argues […]

Although Britain won’t rejoin EFTA, it can learn a great deal from its experience

Although Theresa May wants a bespoke deal with the EU that will be outside the European Free Trade Association, EFTA’s own relationship with the Union is instructive, write Sieglinde Gstöhl (College of Europe) and Christian Frommelt (Liechtenstein Institute). It sheds light on the challenges of an ‘arm’s-length’ relationship with the EU, in particular for trade policy.

In her Florence speech in September, Theresa […]

Where will the UK’s aid budget go when it stops contributing to the EU?

Britain is a major contributor to the EU aid budget. Sophia Price (Leeds Beckett University) discusses how Britain might choose to spend its aid budget once its obligations to the EU – a key element of the ‘divorce bill’ – are fulfilled. Will it continue to direct money towards countries with which it hopes to forge stronger trading relationships? […]

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    The Brexit vote has caused a significant rise in prices, especially food

The Brexit vote has caused a significant rise in prices, especially food

Since the referendum, UK inflation has risen faster than that of the Eurozone. Price rises have varied across sectors, but Josh De Lyon, Swati Dhingra, and Stephen Machin (LSE’s Centre for Economic Performance) show that the rise in the growth rate of food prices has been particularly pronounced. As a result, real wage growth in the UK has again turned negative. 

The pattern […]

Was British business destined to leave the EU?

Was British business destined to leave the EU? While corporate UK was strongly opposed to Brexit, their strategies tell a slightly different story, write Michael Mayer, Julia Hautz, Christian Stadler and Richard Whittington.

Always good to start with a confession: we are what Brexiteers call Remoaners. As Michael Bloomberg says, “it is really hard to understand why a country that was doing […]

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    Brexit was not the voice of the working class nor of the uneducated – it was of the squeezed middle

Brexit was not the voice of the working class nor of the uneducated – it was of the squeezed middle

Lorenza Antonucci, Laszlo Horvath, and André Krouwel challenge the popular view of Leave voters as those left behind educationally and financially. They explain why it is individuals from an intermediate class, whose financial position has been declining, that represent an important section of the Brexit vote.

Over the past year or so, Brexit has been interpreted as the symbol of a historical […]

Going it alone on trade is like bringing a chocolate spoon to a knife fight

What does the Bombardier dispute tell us about the likely impact of Brexit? First of all, state aid is a fact of life in civil aviation, writes Chris Kendall. Without it, companies would not be able to compete effectively in the global market. Free market Leavers believe Britain can prosper without it because our example will encourage others to remove […]