It would be a good thing for the UK economy if the United Kingdom did not leave the European Union, according to the annual report of the Organization for Economic Co-operation and Development (OECD) published in London on Tuesday. The British government refused the proposal.
The 57-page report by the developed industrial farms says that if the decision to terminate Britain’s EU membership by a “political decision”, such as a new referendum, would be reversed, it would have a very positive impact on the growth prospects of the British economy.
In the referendum on British EU membership in June last year, a small, 51.9 percent majority of participants voted out.
The OECD report – responded by Angel Gurría, head of the organization on Tuesday, in London – promptly responded to Downing Street. The British Prime Minister’s spokesman declared that the United Kingdom will leave the EU and there will be no new referendum on this issue. He added that the UK government is aiming to reach the best agreement with the European Union in order to protect British jobs.
A few days ago British Prime Minister Theresa May also stated in a radio interview that there will be no further referendum on British EU membership. “We will do what the British people voted for, we will execute Brexit and exit the European Union on March 29, 2019,” May said in May’s most listening commercial radio in London last week’s LBC interview.
On March 29, Theresa May announced the activation of Article 50 of the Treaty of Lisbon. This article regulates – and the announcement of its activation has started – the Brexit process.
Under Article 50, UK membership of the EU will normally cease to exist two years after notification of a departure order unless there is an exit agreement that will enter into force earlier or if the parties do not agree on the extension of the negotiation process.
According to the OECD report, published in London on Tuesday, if the United Kingdom really leaves the EU, it should maintain the closest trade relationship with the EU, otherwise the British economy will face serious growth risks.
According to the OECD model calculations, if London can not reach a free trade agreement with the EU by 2019 and therefore trade in the Union with the WTO will be subject to the rules of the World Trade Organization (WTO), which would bring tariff and other barriers to bilateral trade, the British economy would slow down by 1.5 percentage points in that year.
This could be a recession, as there are prospective forecasts that will drive growth slower than 1.5 percent in 2019 in the UK economy.
British Chambers of Commerce, which has been advocating UK business, has announced a 1.2 percent increase in the United Kingdom next year, up by 1.4 percent in 2019, ahead of the British economy.
The business organization also worsened GDP growth estimates for 2018 and 2019: in its previous forecast, growth expectations of 1.3 per cent and 1.5 per cent in growth expectations for these two years were included.
The growth risks raised by the OECD were also highlighted by large London-based analytical houses.
The latest comprehensive sector analysis of Moody’s Investors Service in London shows that many sectors of the British economy would be severely affected if London could not reach a comprehensive agreement with the European Union on further trade relations until the end of British membership.
According to Moody’s, the possibility of recession can not be ruled out.
One of the most prestigious economic and financial analysts in London, the Center for Economics and Business Research (CEBR) recently reported that it is likely that the growth rate of the UK economy will slow down further in the coming months, and only the strong foreign trade will avoid the recession.
Source: MTI / Image: maszol.ro /