The Economic Consequences of Brexit: A Taxing Decision

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Series Details No.16, April 2016
Publication Date April 2016
ISSN 2226-583X
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Membership of the European Union has contributed to the economic prosperity of the United Kingdom. Uncertainty about the outcome of the referendum has already started to weaken growth in the United Kingdom. A UK exit (Brexit) would be a major negative shock to the UK economy, with economic fallout in the rest of the OECD, particularly other European countries. In some respects, Brexit would be akin to a tax on GDP, imposing a persistent and rising cost on the economy that would not be incurred if the UK remained in the EU.

Subsequently, on the publication of the OECD Global Economic Outlook on the 1 June 2016 the OECD said that , a United Kingdom vote to leave the European Union would trigger negative economic effects on the UK, other European countries and the rest of the world. Brexit would lead to economic uncertainty and hinder trade growth, with global effects being even stronger if the British withdrawal from the EU triggered volatility in financial markets. By 2030, post-Brexit UK GDP could be over 5% lower than if the country remained in the European Union.

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Related Links
Website: OECD iLibrary
ESO: In Focus: Brexit - The United Kingdom and the European Union
BBC News, 27.04.16: EU referendum: OECD warning of 'Brexit tax' sparks row
EurActiv, 27.04.16: Britain would be less well off after Brexit: OECD
The Independent, 27.04.16: EU referendum: Brexit would cause 'tax-like' burden on UK incomes, OECD warns
Deutsche Welle, 27.04.16: OECD wades into Brexit debate
The Guardian, 27.04.16: Brexit would cost UK households £2,200 by 2020, says OECD
Vote Leave, 27.04.16: Pessimistic OECD report admits economy will grow and migration will be controlled if we Vote Leave
OECD: News, 27.04.16: OECD study finds Britons will be paying a heavy 'Brexit tax' for many years if UK leaves EU
OECD: News, 01.06.16: Global economy stuck in low-growth trap: Policymakers need to act to keep promises, OECD says in latest Economic Outlook
Britain Stronger in Europe: News, 01.06.16: Chancellor - OECD report shows 'grim economic consequences' of leaving Europe
BBC News, 01.06.16: OECD warns of Brexit 'negative shock'

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