InvestmentsNov 14 2017

Brexit exits of EU migrants set to hit UK GDP

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Brexit exits of EU migrants set to hit UK GDP

Research from Big Four accountancy firm PwC has suggested a halving of the number of migrants coming to the UK from the EU would have a significantly negative impact on UK growth. 

The data, contained in PwC’s latest UK Economic Outlook document, projected that GDP per capita would fall by around £60 per person in 2030.

The research concluded that if the number of EU migrants halved between 2017 and 2030, UK GDP per head of population would be 0.2 per cent lower in 2030 than otherwise.

The data said total UK GDP would be around one per cent lower, but the smaller population would mean a reduced impact for each individual of £60 per head, adjusted to 2017 values.

The sectors of the economy most likely to be impacted, according to PwC, are food production, accommodation and construction.

John Hawksworth, chief economist at PwC, said: “Our estimate of the long term impact of reduced net migration from the EU27 on UK GDP per capita after Brexit is negative, but relatively small compared to the many other uncertainties about average UK income levels in 2030.

“But limiting migration from the EEA could disproportionately impact some sectors and regions. By identifying the industries and areas that could be worst affected, the government can make informed decisions on post-Brexit migration policy and target their support accordingly.

"Curbing recruitment of high skilled workers from the EEA could have particularly negative implications for longer term productivity and the UK’s international competitiveness.”

Jonathan Davis, adviser at Jonathan Davis Wealth Management in Hertford, said: “No question some companies will be severely detrimentally affected, short to medium term, by Brexit.  

"Others will do fantastically well from Brexit. My outlook is there will be a net benefit, economically, to the UK from Brexit. Brexit, however, has zero impact on my investment thinking.”