Brexit

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So what would this mean for the economy? Based on the reduction in trade alone, under May’s deal (assuming no productivity effect, on which more in a moment) income per capita would have been 1.7% lower than under membership. The equivalent figure for the Johnson deal is 2.5%, while that for a World Trade Organization Brexit (no trade deal at all) is 3.3%. However, economists are convinced that reductions in trade also affect productivity. The literature suggests that a 1% decline in trade reduces income per capita by about 0.5%. If, then, we combine this productivity effect with the trade impacts summarised above, we arrive at per capita GDP figures of -4.9%, -6.4% and -8.1% for May’s deal, Johnson’s proposals and a WTO Brexit respectively, as compared with membership.

 Boris Johnson’s Brexit deal would make people worse off than Theresa May’s | Anand Menon and Jonathan Portes | Opinion | The Guardian

• Not given the attention it deserves but Johnson aims a much looser tie to the EU compared to the deal Theresa May negotiated, and this significantly increases the impact on trade with the EU (and slows productivity growth more as a result). The upshot is that the negative economic impact is significantly higher under a Johnson deal.