London’s economy after Brexit: Impact and implications
Updated analysis by Cambridge Econometrics explores the economic impact of the UK leaving the Customs Union and Single Market compared to if UK had stayed in, revealing how London’s economy would have grown faster had Brexit not happened.
In 2018, the Mayor of London Sadiq Khan commissioned Cambridge Econometrics to analyse the potential impact of different Brexit scenarios on London and the UK as a whole.
Fast forward to now, with support from the Greater London Authority (GLA), Cambridge Econometrics has revisited that analysis to project the economic impacts of the UK’s departure from the Customs Union and Single Market, including the impact of the UK-EU Trade and Cooperation Agreement.
Comparing a central scenario to one in which the UK stayed in the Customs Union and Single Market, by 2035, Cambridge Econometrics projects:
- GVA will be 10.% lower in the UK and 7.5% lower in London.
- The UK will have 3 million fewer jobs, of which approximately 500,000 would have been in London.
- The UK will have 32% lower investment, leading to lower output.
- The UK will have 15.8% lower imports and 4.6% lower exports.
- London’s productivity will remain approximately the same; however, London will have lower GVA and employment.
- The productivity gap between London and the rest of the UK will further widen, due to a larger slowdown in GVA growth in the rest of the UK relative to London.
London’s economy would have grown faster if Brexit hadn’t taken place. Brexit will continue to have an impact on the UK and London economies in the medium-term.