Brexit: Situation and Economic Consequences
12 Pages Posted: 17 Dec 2020
Date Written: December 4, 2020
The effective departure of the United Kingdom (UK) from the European Union (EU) opens up a new period of relations between the two areas. The current health crisis limits economic policies’ room for manoeuvre to accommodate the costs of transitioning to a new economic relationship, whatever final form it may take. This article describes the most recent developments in the negotiation process and outlines three possible scenarios for the future EU-UK trading relationship, providing simulations of the potential macroeconomic impact in each case. Moreover, the recent trend in trading and financial relations between the United Kingdom and Spain is set out in a box.
Keywords: Brexit, NiGEM, scenario analysis, tariffs, non-tariff barriers, migration, FDI
JEL Classification: F15, F47, F53
Suggested Citation: Suggested Citation