Brexit has cost UK economy £66bn so far, study finds

Britain has missed out on £550m per week of growth since June 2016 refeerendum, according to Standard & Poor's

Brexit has cost the British economy £66bn in just under three years, or around £1,000 for every person in the country, a report has found.

As deadlock in Westminster continues, businesses have slashed investment and around 3 per cent has been wiped off GDP, according to Standard & Poor’s.

It calculated that since the June 2016 referendum the UK has missed out on £550m of economic growth per week.

A sharp drop in the value of the pound has caused much of the damage by reducing people’s purchasing power, S&P said. Weaker sterling has meant imports are more expensive, with rising prices passed on to consumers.

“Household spending would have been considerably stronger - in line with GDP - had the referendum not occurred,” S&P said in its report, Countdown To Brexit: What Might Have Been For The UK Economy.

A devalued pound would often be expected to boost Britain’s exports as they become cheaper for overseas buyers who hold other currencies.

But UK businesses have enjoyed no significant increase in overseas sales, the analysis found.

S&P senior economist Boris Glass said: “Uncertainty over the shape and form Brexit will take has increasingly paralysed any forward-looking decision making.

“This is reflected in particular in a contraction of business investment in 2018.”

As Brexit approached, and uncertainty about the form it would take increased, businesses put investment plans on hold and instead implemented no-deal contingency plans.

When politicians finally present a clear view of the post-Brexit landscape, there is likely to be a “moderate” improvement in investment but it will take some time to kick in, S&P said.

The reports authors warn that any improvement will be dampened because, whatever form Brexit takes, British businesses have reorganised to comply with additional regulations.

The latest Brexit impact assessment comes after Goldman Sachs estimated that the UK has foregone £600m of economic growth each week since the referendum.The Bank of England put the figure at £800m.

All three figures contrast with the Leave campaign's claim prior to the referendum that Brexit would result in a £350m-per-week saving for the UK.