Insight
The cost of Brexit: October 2021 by John Springford 13 December 2021
In October 2021, UK goods trade was 15.7 per cent, or £12.6 billion, lower than it would have been if the UK had stayed in the EU’s single market and customs union. For many months, the CER’s cost of Brexit model has found that UK goods trade is between 11 and 16 per cent lower as a result of Britain’s exit from the single market and customs union in January 2021. Using the data for October 2021, the model puts the cost at 15.7 per cent, or £12.6 billion (Chart 1). That’s a little higher than the estimate for September (12.2 per cent), because imports and exports grew more rapidly in October in ‘doppelgänger UK’ – a group of countries whose trade and other economic data closely matched that of the UK between the referendum and the end of the transition period.
CER INSIGHT: The cost of Brexit: OCTOBER 2021 13 December 2021
info@cer.EU | WWW.CER.EU
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Insight
Chart 1: The cost of Brexit, October 2021 UK
90
Doppelgänger UK
Single market exit
Exports plus imports, £bn, seasonally adjusted
80
£12.6 bn/ 15.7% shortfall in total goods trade
70 60 50 40 30 20 10
t2
Oc
Ju
ly
20
16 01 Ja 6 n Ap 201 ril 7 2 Ju 017 ly 2 Oc 017 t2 0 Ja 17 n Ap 201 ril 8 2 Ju 018 ly 20 Oc 18 t2 Ja 018 n Ap 201 ril 9 2 Ju 019 ly 2 Oc 019 t2 0 Ja 19 n 2 Ap 02 ril 0 2 Ju 020 ly 2 Oc 020 t2 0 Ja 20 n Ap 202 ril 1 2 Ju 021 ly 2 Oc 021 t2 02 1
0
Source: CER analysis of ONS data.
The doppelgänger is a subset of countries selected from a larger group of 22 advanced economies by an algorithm. The algorithm finds the countries that, when combined, create a doppelgänger UK that has the smallest possible deviation from the real UK data until December 2019, before the pandemic struck. (The data includes goods trade, GDP growth, population, inflation, industrial production as a share of output, as well as some other measures. More information on the model, including Stata code and input data, is available here.) ITV News covered the latest estimate in a report on Friday 10th December, which is available to watch here. John Springford is deputy director of the Centre for European Reform.
CER INSIGHT: The cost of Brexit: OCTOBER 2021 13 December 2021
info@cer.EU | WWW.CER.EU
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