Reverse Brexit for 'positive' and 'significant' economic boost - OECD
Reversing Brexit would have a “significant” and “positive” impact on the British economy, according to the Organisation for Economic Co-operation and Development.
The Paris-based organisation said keeping close links to the EU would be “crucial” to Britain’s future prosperity, while a ‘no deal’ Brexit could be catastrophic for the British economy.
Its latest economic survey claims that leaving the EU without agreeing a trade deal would lead to a fall in business investment, further devaluation of sterling and a downgrade of the UK’s credit rating.
However, their gloomy outlook for the UK assumes a future trading relationship based on World Trade Organisation rules, rather than the bespoke deal the Government is aiming for.
The Treasury made clear it was not contemplating a ‘no deal’ scenario and was focused on achieving a good trade deal from the negotiations with Brussels.
But the OECD suggests that reversing Brexit might be the simplest way to boost the economy.
“In case Brexit gets reversed by political decision (change of majority, new referendum, etc), the positive impact on growth would be significant,” its latest report state.
The thinktank's secretary-general, Angel Gurria, told a press conference in London that maintaining close economic ties was essential for the UK.
"The United Kingdom is facing challenging times, with Brexit creating serious economic uncertainties that could stifle growth for years to come,” he said.
“Maintaining the closest economic relationship with the European Union will be absolutely key, for the trade of goods and services as well as the movement of labour."
‘NO SECOND REFERENDUM’
But a Treasury spokesperson made clear the Government would not contemplate another referendum
“We are working to achieve the best deal with the EU that protects jobs and the economy. We aim to agree a Free Trade Agreement that is comprehensive and ambitious.
“Our £23 billion National Productivity Investment Fund which will improve our country’s infrastructure, increase research and development and build more houses.
“We are leaving the EU and there will not be a second referendum.”
The OECD also highlighted challenges such as low productivity and a growth in insecure employment which are hampering the UK’s economic performance.
Appearing alongside Mr Gurria, Philip Hammond said he would be introducing measures in the upcoming Budget to tackle low productivity.
"This is a theme that you've heard me speak about before...it's something that I will return to at the Budget," the Chancellor said.
"There is great potential to exploit the underlying strength of the UK economy and boosting productivity is the way to turn those strengths into real wage growth.
"We’ve made good progress on employment and the deficit, but it is by boosting productivity that we can raise living standards further."