Five years to recover. At least, it's not 50 years.

Overall, the OBR’s claim that recent UK economic developments support their view that Brexit will cut long-term GDP by 4% is both unconvincing and arguably misleading. It is based on a questionable interpretation of recent trade data, an interpretation that can also be considered extremely premature given the coronavirus-related distortions (affecting both the supply and demand for UK products and the level and pattern of UK import demand) currently affecting the trade figures.



The OBR claims are also based on continuing to assert a strong link between trade intensity and productivity despite strong evidence such a link may not exist. It is important to note here just how important this questionable trade to productivity link is in underpinning OBR’s claims. Even if the OBR proves to be right about Brexit reducing total UK trade by 15% in the long run (which we think is unlikely) without the productivity effect this would produce only a small long run impact on GDP – most standard economic models would yield an effect of less than 1% of GDP.



It is disappointing and inappropriate that a supposedly independent body like the OBR continues to produce Brexit analyses which are so unbalanced, especially given the continued political sensitivity of the issue.