GDP growth steady but could fall 3.4% post-Brexit: NIESR

Its previous estimates show that GDP rose by 0.4% in the three months to October after growth of 0.5% in the three months ending in September.

However a new NIESR paper, released earlier today, estimated that a sharp fall in migration post Brexit could shrink GDP per capita by up to 3.4% a year.

EU migration to the UK is predicted to fall by well over half between now and 2020, resulting in net EU migration falling by more than 100,000.

Over the period to 2030 – the period covered by the analyses published by HM Treasury, the OECD, and NIESR - the paper says the hit to GDP per capita could be up to 3.4%, a similar order of magnitude to the impact from falls in investment and trade found by these studies. By contrast, the increase in low-skilled wages resulting from reduced migration is expected to be relatively modest.

NIESR fellow, Jonathan Portes, said: "Prior to the referendum, a number of analyses estimated the long-term impacts of Brexit on the UK economy; but none incorporated the impacts of Brexit-induced reductions in migration. Our estimates suggest that the negative impacts on per capita GDP will be significant, potentially approaching those resulting from reduced trade."