OECD: Brexit could cut UK GDP 5% by 2030

OECD chief economist Catherine Mann

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” said the Organisation for Economic Co-operation and Development (OECD) in its latest economic outlook.

“Brexit would lead to economic uncertainty and hinder trade growth, with global effects being even stronger if the British withdrawal from the EU triggers volatility in financial markets,” said the OECD.

“By 2030, post-Brexit UK GDP could be over 5% lower than if the country remained in the European Union.”

The threat of Brexit was just one of a number of downside risks to the international economy the OECD outlook drew attention to.

It said the global economy was “stuck in a low-growth trap that will require more coordinated and comprehensive use of fiscal, monetary and structural policies to move to a higher growth path and ensure that promises are kept to both young and old.”

The OECD said weak trade growth, sluggish investment, subdued wages and slower activity in key emerging markets would all contribute to modest global GDP growth of 3% in 2016, essentially the same level as in 2015.

“If we don’t take action to boost productivity and potential growth, both younger and older generations will be worse off,” said OECD chief economist Catherine Mann.

“The longer the global economy remains in this low-growth trap, the harder it will be for governments to meet fundamental promises.

“The consequences of policy inaction will be low career prospects for today’s youth, who have suffered so much already from the crisis, and lower retirement income for future pensioners.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.