Here's how much losing access to the Single Market could cost the UK economy as financial services are forecast to take the biggest hit

Rebecca Smith
Theresa May said in January that Britain could not stay in the Single Market
Theresa May said in January that Britain could not stay in the Single Market (Source: Getty)

There has been much discussion around what losing access to the Single Market will mean for Britain, and now, a new report has totted up how much it would cost the UK economy if no deal was secured on services.

A report by the Centre for Economics and Business Research, commissioned by the anti-Brexit campaign Open Britain, found the potential cost to the UK economy of Britain leaving the Single Market would be between £25bn and £36bn a year.

Read more: Overseas firms holding their horses on UK investments because of Brexit

If access to the market in services is restricted, the expected scenario is a loss of between 1.4 per cent and two per cent of GDP, or between £25bn and £36bn a year. Little or no preferential access to the Single Market will be a particular hit for the likes of financial services, IT, telecoms and transport, all of which will register export losses of 15 per cent or more or £21bn to £30.5bn.

The report said financial services would be most negatively impacted, accounting for about a third of the losses.

These losses could be offset through new trade relationships, but if not, will likely result in a decline of between 9.5 per cent and 14 per cent in the UK's total service exports.

Former Liberal Democrat deputy prime minister Nick Clegg, supporter of the Open Britain campaign, said: "This report exposes what is at risk if Theresa May fails to deliver on her promise to deliver a trade deal with the exact same benefits as membership of the Single Market.

"Truly free trade is not just tariff free; it reduces rules and red tape, something that is particularly important for services, which make up 80 per cent of our economy."

Instead of pretending that we can have all the benefits outside of the Single Market as in it, ministers must start dealing in reality rather than rhetoric.

Read more: Brexit's true economic dividend: A revival of self-reliance and liberty

Prime Minister Theresa May said in January that the UK "cannot possibly" remain within the Single Market as it would effectively mean "not leaving the EU at all", but said she will push for the "freest possible trade" with European countries.

She has also warned that efforts to punish the UK would be "an act of calamitous self-harm" for the EU.

The Single Market in services aims to give firms in Europe the ability to operate on the same basis across each member state as long as they adhere to a standard set of rules and regulations.

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