Hard Brexit Could Cost UK Economy £54bn

Research carried out by Cambridge Econometrics suggests by 2030 economic output across the UK could be about 3% lower on average if the UK were to leave both the single market and customs union, with London's economy shrinking by 2%, Sky News reports.

Scenarios assessed range from leaving the single market, leaving the customs union, leaving both together and failing to get a transition deal, described by the study as "hard Brexit".

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The analysis said 500,000 jobs will be under threat by 2030 in the event of a no deal scenario, including 87,000 in London, while financial and professional services will be the "worst affected key sector" with up to 119,000 fewer jobs nationally.

The hit is less severe than was predicted by the Treasury before the referendum, with the analysis forecasting a hit to the economy of 7.5% by 2030 in the event of a hard Brexit.

The economic studies commissioned by Mayor of London Sadiq Khan, revealed on Thursday, analyse the outcomes on regions and nine key sectors, and follow Brexit Secretary David Davis' failure to commission similar analysis on behalf of the government, despite suggesting he had.

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Commenting on the study's findings, Khan said: "This independent analysis should help guide the Government to the best outcome for London and the UK.

"If the Government continues to mishandle the negotiations we could be heading for a lost decade of lower growth and lower employment.

"The analysis concludes that the harder the Brexit we end up with, the bigger the potential impact on jobs, growth and living standards.

"Ministers are fast running out of time to turn the negotiations around. A 'no deal' hard Brexit is still a very real risk - the worst possible scenario."

The Government has previously insisted such analysis could undermine negotiations, refusing to release such information, which it has also said does not exist.

Last month the Government was obliged to release some Brexit sectoral analyses after losing a binding vote in the House of Commons.

The Treasury is understood to have carried out similar calculations, but it is unclear if the cabinet sub-committee that is responsible for keeping an eye on negotiations have been shown them.

Leave-voting cabinet members have previously dismissed such studies as "Project Fear".

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But Khan said commissioning the study was justified, adding it is "astonishing that the Government has failed to do any proper impact assessments on what Brexit could mean for our economy".

"Their complete lack of preparation is irresponsible leading to fears that they are putting party politics ahead of the national interest.

"I've released these impact assessments because the British people and our businesses have a right to know the likely impact of the various options the government are considering on their lives and personal finances.

"This new analysis shows why the Government should now change its approach and negotiate a deal that enables us to remain in both the single market and the customs union."