A new Papers in Regional Science article that highlights the possible implications of Brexit for the UK and its regions notes that the results for the UK economy may not be as damaging as some forecasters say.
The authors point out that there have been numerous differing forecasts at the national level concerning the impact of Brexit. They concentrate on the forecasts by Her Majesty's Treasury (HMT), the Cambridge Centre for Business Research, and the Economists for Brexit. Reviewing the evidence and the underlying assumptions they conclude that the estimates of HMT of the potential loss of GDP are likely to be overstated; however, Brexit will almost certainly cause regional disparities to widen.
"The UK is entering uncharted waters. Whatever the actual size of adverse effects of Brexit to the UK economy, it is almost inevitable that Brexit will worsen regional disparities and this points to the urgent need for the spatial rebalancing of the UK economy" said co-author Prof. John McCombie, of the University of Cambridge, in the UK.