Costs from regulatory divergence likely to be at least as important as border costs in the long run, but not immediately 2/
A few thoughts on how Brexit is likely to affect the UK economy in 2021 - with the caveat that much remains uncertain 1/
Costs from regulatory divergence likely to be at least as important as border costs in the long run, but not immediately 2/
However, I do not anticipate shortages of essential goods, as imports can be expedited if needed, e.g. air freight, priority customs processing 3/
- Red tape, e.g. need for customs workers wastes resources & lowers productivity
wasting resources
- Tariffs (if no deal)
- Rules of origin (if deal)
- Lost market access for services
https://t.co/07wNehNn7z 5/
Fwiw I get told that economics and process considerations (haulage, logistics, manufacturing etc) play limited role in #brexit inner circle decision-making. Belief it\u2019ll be messy but business will adjust. Q is more short term political embarrassment. 2/2
— Peter Foster (@pmdfoster) December 13, 2020
Consumer price rises likely to be moderate (low single digits?) but will gradually erode living standards similar to post-referendum https://t.co/l7Zyegk7MZ 6/
Cost of living
— Thomas Sampson (@thom_sampson) June 22, 2020
Leave vote caused sterling to fall by around 10% raising import costs & consumer prices
Breinlich, Leromain, @DennisNovy & I estimate depreciation increased cost of living by 2.9% by Q2 2018, costing average household \xa3870 per yearhttps://t.co/FsI5enlGfk 4/
https://t.co/d2r6M1GlvB 7/
Which industries are most exposed to EU tariffs under no deal?
— Thomas Sampson (@thom_sampson) December 7, 2020
12 sectors (HS 4 digit) have exports to the EU above \xa3350 million & would face an average EU tariff (ad-valorem equivalent) of at least 10% under no deal
Motor vehicles, clothing, meat & dairy feature prominently
time passes. 8/
And, as the Bank of England has noted, monetary policy cannot offset the impact of a permanent negative supply shock 10/
costs to tax payers rather than solving underlying problem of higher trade costs 11/
https://t.co/2ZULlcIotu
Excellent @UKandEU report on implications of new deal. @anandMenon1 @jdportes @jillongovt: https://t.co/OV0XXk5ypk
Interesting @JohnSpringford @tomashirstecon piece on interactions between Brexit & Covid:
https://t.co/pgasjQHwzw