According to many analysts, Brexit poses more threat to the British economy than the COVID-19 pandemic. The Office for Budget Responsibility (OBR) estimates that the consequences of the UK’s exit from the EU will reduce the country's GDP by 4%, while the coronavirus pandemic will cut it by 2%.
In accordance with the agency's calculations, the post-Brexit consequences are more devastating for the British economy than the impact of the COVID-19 crisis. The country's GDP will decrease by 4% in the long term amid Brexit. At the same time, the OBR believes that the negative impact of the coronavirus pandemic will be limited to a 2% drop in the UK GDP.
The UK economic situation has severely aggravated after the exit from the EU. Problems with the supply of goods amid the introduction of strict immigration rules and increased tariffs have added fuel to the fire.
On October 27, British Finance Minister Rishi Sunak presented the draft UK budget for the next year, which provides for higher taxes and multibillion-dollar financial aid to most economic sectors.
According to R. Sunak, the British Treasury expects GDP growth of 6.5% by the end of this year and 6% in 2022 respectively. Experts believe that next year the UK economy will reach pre-crisis levels. At the same time, the OBR emphasizes that inflation is likely to rise to 5%. Analysts are worried about the possible increase in the price of basic consumer goods. Consequently, the cost of living of UK citizens may hit all-time highs in the last 30 years.
