The cost of a Brexit on exports could hit £30bn if the UK decides to leave the EU without a new free trade agreement (FTA), according to new research released yesterday.
The report from credit insurance giant Euler Hermes said Brexit without an FTA would cause a sharp contraction in the UK economy, with total goods exports falling eight per cent. It would take 10 years to fill the export gap with extra trade with commonwealth nations. Company turnover could contract by one per cent per year on average even if an FTA is agreed.
Eurler Hermes puts this down to direct export losses, falling margins due to higher import and borrowing costs and less foreign direct investment.
“While some of the risk could be mitigated if a Free Trade Agreement were to be agreed during exit negotiations, our forecasts paint a dismal picture for British businesses in a world outside of the EU,” said economist Ana Boata from Euler Hermes.