Soft Brexit will help British Economy to Grow by 1.9% until 2019

The National Institute of Economic and Social Research (Niesr) assessed that the British economy could grow by 1.9 percent this year and in 2018 in the condition that ministers will impose a soft Brexit. Niesr mentioned that the relatively acceptable forecasts were based on projections that Britain will maintain a full access to the European markets in 2019, in response to the continuous payments of the EU budget together with the fixed levels of net migration from the country.

The tink thank further stated that the accompanying strong GDP estimate for the United Kingdom depends on the strength of the world economy, instead of the progress in the Brexit negotiations. However, the recent talks improved the projections for business investment, as the net trade could support the economic growth of UK in the next couple of years and help the rebalancing of the economy.

Niesr Director Jagjit Chadha said that the growth in the previous year seems higher due to improved overseas growth. The GDP forecast of the research institute is more advanced compared with other forecasters. In November last year, the Organisation for Economic Cooperation predicted for a 1.1 percent growth for the UK in 2019, while the latest reading of the International Monetary Fund outlined an estimate of 1.5 percent.

Niesr further conducted a representation that shows projections in case that Britain crashed out EU to the basic World Trade Organisation rules due to some advocate of prominent Brexiteers, then the UK will fell off into recession while the GDP level would be lower than 6 percent in the year 2030 due to declining exports and poor productivity growth.

The official policy of the government is to deal with the expected two-year Brexit transition period to dole out after March next year. Hence, the country certainly continues to be in the single market and its customs union. Aside from that, Theresa May expressed her desires to work on a comprehensive free trade agreement with the European Union. However, there are some ministers on the other hand that hopes to create a new long-term customs union with other members of the group.