Mayor’s analysis of the impact of Brexit

You can read the Mayor’s report on the impact of Brexit here.

Key findings from the report are:

*   The London results are similar to the UK results in that the impact of Brexit is negative and gets progressively more negative (compared to what may have happened if the UK remained in the Single Market and Customs Union), moving from Scenario 2 to Scenario 5. However, London’s economy would suffer significantly less from Brexit than the rest of the UK.

*   London’s professional and financial services would be the worst hit by a no-deal hard Brexit, with 29,000 fewer jobs by 2030 than if we remained in the Single Market and Customs Union. There would be 11,000 fewer jobs in science and technology, 5,000 fewer jobs in construction and 6,000 fewer jobs across London’s creative sector.

*   Overall, London is not expected to be affected as much as the UK, in terms of GVA and productivity. On the other hand, the population (and so employment) impacts in London are noticeably stronger than in the UK. London has a larger proportion of non-UK workers, so border restrictions and a reduction in EU migration are expected to impact London the most.

In total, five scenarios were modelled by Cambridge Econometrics to illustrate the range of possible outcomes of the UK’s future relationship with the EU. These are:

*   Scenario 1 – A ‘close to status quo’ scenario where the UK remains part of both of the single market and customs union

*   Scenario 2 –  A scenario where the UK remains part of the single market, but not the customs union.

*   Scenario 3 – A scenario where the UK remains part of the customs union, but not the single market.

*   Scenario 4 –  A hard Brexit scenario in which trade between the UK and the EU falls under World Trade Organisation (WTO) rules with a two-year transition period from March 2019; and

*   Scenario 5 – The same hard Brexit scenario but without a two-year transition period.