You report (“Khan cites £140bn Brexit blow in call for honest debate on EU”, January 12) on a study of the Brexit effects on the UK economy by the consultancy Cambridge Econometrics, commissioned by London mayor Sadiq Khan, which claims that UK gross domestic product has already fallen by 6 per cent and stands to fall in total by 10 per cent by 2035 permanently.
These findings come from their multi-country model, on the assumption that Brexit has permanently raised both tariff and non-tariff trade barriers with both the EU and the rest of the world by substantial amounts (up to 10 per cent for tariffs and up to 55 per cent for non-tariff barriers).
Yet the government policies for Brexit are aimed at maintaining barrier-free trade with the EU via the Trade and Cooperation Agreement and eliminating trade barriers with the rest of the world via an ongoing programme of free trade agreements. It is hard to see the justification for assuming policies the total opposite of those being actually pursued.
I would add that their model of trade ignores the usual supply factors prominent in comparative advantage and so is lacking key elements of a trade model.
But most damning of all is that significant Brexit effects such as they claim are simply not to be found in statistical time-series modelling of the UK data on trade and other macro variables
Professor Patrick Minford
Professor of Applied Economics
Cardiff Business School
Cardiff University, Cardiff, UK
