Miscalculating the cost of Brexit | Letters | Politics

Published on February 12, 2018


The unnecessary policy of austerity pursued over the last few years has done more damage to the UK growth rate than any of the Brexit scenarios, argues
Professor Tony Thirlwall














Economics expert Tony Thirlwall says the way the media has reported the potential costs of Brexit is misleading.
Photograph: Getty/iStockphoto

The way you (and other newspapers) have reported the Treasury estimates of the potential costs of Brexit to the UK as a whole, and to the regions, under different Brexit scenarios is very misleading (Revealed: the £80bn cost of hard Brexit, 8 February).

The reported average estimated cost of 10% or so is not of a “hit to growth” (as you put it) but of the potential reduction in the level of output over a period of 15 years compared with staying in the EU. A reduction in output of 10% over a 15-year period is a “hit” to the growth rate of less than 0.5% per annum (compound), which is within the margin of error, and takes no account of compensatory domestic policy.

The unnecessary economic policy of austerity that has been pursued over the last few years has done far more damage to the growth rate of the UK economy than any of the Brexit scenarios, and an end to austerity would more than compensate for any putative Brexit loss.
Tony Thirlwall
Professor of applied economics, Keynes College, University of Kent

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