Brexit a bigger threat to UK GDP than Covid-19 – concern as US federal debt tops $26.6tn

25th August 2020 (Last Updated August 25th, 2020 08:32)

25 August

The Covid-19 pandemic appeared at a time when the UK was preparing for Brexit.

The debate on a no deal Brexit and a Brexit with a free trade agreement continue, although the impact of the pandemic adds another element to the debate.

Dina D. Pomeranz, economics professor at University of Zurich, shared an article on how the impact of Brexit could be two to three times greater than Covid-19 on the UK economy.

The UK GDP is projected to decline by 1.7% over the next to three two years without much long-term impact.

However, the impact of Brexit on GDP is expected to emerge gradually.

Analysis by the government has indicated that a no deal Brexit could result in a decline of 7.6% in GDP after 15 years, while Brexit with a free trade agreement could lead to a 4.9% decline in GDP.

In other news, Professor Steve Hanke, economist at Johns Hopkins University, tweeted on US Representative Alexandria Ocasio-Cortez’s calls for additional financial stimulus.

He noted that government spending is already at a high, which has pushed the US federal debt to more than $26.6tn.

Hanke questioned as to how the deficit created by the increased spending will be addressed.

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