A second referendum that reversed Brexit would have a ‘significant’ and ‘positive’ impact on the UK’s economy, according to a report by The Organisation for Economic Co-operation and Development.
OECD has projected that the British economy will only grow 1% over the next year, partly down to uncertainty over Brexit. It also adds that exchange rates could be pushed to new lows if the UK leaves the European Union without agreeing a deal.
As highlighted by the Telegraph, the report says: ‘In case Brexit gets reversed by political decision (change of majority, new referendum, etc.), the positive impact on growth would be significant.’
On a scenario in which the UK leaves without securing a deal with the EU, the report says: ‘A break-up of EU-UK negotiations, cancelling out the prospect of a trading relationship in the foreseeable future, would trigger an adverse reaction of financial markets, pushing the exchange rate to new lows and leading to sovereign rating downgrades.
‘Business investment would seize up, and heightened price pressures would choke off private consumption. The current account deficit could be harder to finance, although its size would likely be reduced.’
News of the report comes on the same day that Theresa May and EU Commission President Jean-Claude Juncker agreed to ‘accelerate’ Brexit negotiations, with the UK’s financial settlement with the EU continuing to be an obstacle.
