Boris Johnson’s Brexit deal will leave Britons 6 per cent poorer if it passes, economists say
- Compared to agreement reached by Theresa May – and rejected three times – Johnson’s deal means greater trade barriers with EU
- British finance minister Sajid Javid argues, however, that deal will end uncertainty that has held back investment
Britain will be on course for more distant economic ties with the European Union, making the country poorer, if Prime Minister Boris Johnson wins parliamentary backing for the Brexit deal he clinched with Brussels on Thursday.
Compared with the deal his predecessor Theresa May reached last year – which parliament rejected three times – Johnson’s deal aims for less regulatory alignment with the EU, and greater trade barriers between Britain and its largest trading partner.
Johnson now faces a fight to convince parliament, where his Conservative Party lacks a majority, to approve the deal in a vote due to take place on Saturday.
“Even if Boris Johnson does manage to close the deal, investor celebration of this might soon be dampened by the recognition that this is a fairly hard Brexit,” said Paul O’Connor, a fund manager at Janus Henderson.
Britain’s finance ministry and almost all external economists have forecast that increased trade barriers will cause the British economy to grow more slowly than if it were to stay in the EU, and the damage increases as trade barriers rise.
