Economics of Brexit

The DUP scuppered a Brexit deal for all the wrong reasons

Why did the DUP veto the proposed border arrangements for Northern Ireland? It was not because of pragmatic considerations, writes Anthony Costello (University College Cork), but through the simple desire to reassert unionism – even at the cost of a hard and damaging Brexit. Only if Northern Ireland can negotiate a new power-sharing deal will it be possible to […]

Ultimately, public opinion is unlikely to tolerate a hard Brexit

Given the high costs associated with a hard Brexit, argues Dennis Shen (Scope Ratings), it is unlikely to happen. The EU27 see no advantage in significant concessions and the challenge of maintaining public support for a hard Brexit is considerable. A transition period concluding in a soft Brexit – or even ‘Breversal’ – are the most likely outcomes.

The UK government’s objective remains a […]

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    We need to get the data issue right in the Brexit negotiations

We need to get the data issue right in the Brexit negotiations

As businesses in all industries become increasingly digital, describing the technology sector as a separate category makes a little less sense. Banking, retail, the media and all kinds of services are going online. This digitalisation of economic activity poses a challenge to the idea of borders, and makes the Brexit negotiations especially difficult. Julian David (techUK) says that a large number of industries […]

Expect a backlash if the £50bn offer doesn’t move negotiations on

After threatening to pay nothing to the EU, then conceding £20bn, the government has finally indicated it will pay a Brexit ‘divorce bill’ of £40-50bn. The initial reaction from Eurosceptics has been rather muted, writes Iain Begg (LSE). But if the European Council does not allow exit negotiations to move to the next stage, we can expect a serious backlash […]

Post-Brexit UK trade policy remains a wish list

About half of UK’s trade and investment is with the EU and, as a member of the single market, the UK implements similar standards for products and services as the EU. Furthermore, as a member of the customs union, the UK operates a common external tariff, and goods and services can move seamlessly with no customs or compliance checks. How […]

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    The productivity gap adds to the concerns about how Brexit can be navigated

The productivity gap adds to the concerns about how Brexit can be navigated

In this blog, Iain Begg (LSE) explains why the low expectations of the trend of productivity growth in the UK, published by the Office for Budget Responsibility, add to the concerns about how Brexit can be navigated.

Chancellors usually try to achieve three things in their annual budget speeches: setting a course for the economy; pulling rabbits from their hats […]

Brexit, the four freedoms and the indivisibility dogma

The EU’s position in the Brexit negotiations is based on the premise that the four freedoms of the single market – goods, capital, services, and labour – are indivisible. Wilhelm Kohler and Gernot Müller (University of Tübingen) argue that this indivisibility claim has no economic foundations, and that negotiating on this premise risks unnecessary harm. Reintroducing trade barriers will inflict damage on both […]

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 […]