Answer: $627 million
Britain’s on-again, off-again relationship with the EU has cost the United Kingdom immensely since the country held a referendum on leaving the bloc in 2016. According to Goldman Sachs, the impending divorce has cost the United Kingdom an estimated $627 million in lost economic output per week since that fateful day, almost three years ago. In a note to their clients, Goldman stated that obvious, saying that “politicians in the UK are still struggling to deliver on that vote”, pointing out that “the resulting uncertainty over the future political and economic relationship with the EU has had real costs for the UK economy, which have spilled over to other economies.” According to Reuters, “Brexit cost the world’s fifth largest economy nearly 2.5 percent of GDP at the end of last year, compared to its growth path prior to the mid-2016 vote on exiting the bloc.”
A major driver of the loss of economic output is the hesitation caused by Brexit. Companies both domestic and foreign can’t get a read on what the final outcome will be – whether Brexit will lead to a hard crash out of the United Kingdom, or maybe not even happen at all. As a result, multinational corporations are in a holding pattern, and some have simply rerouted to other countries still in the European Union to move on while the chaos in England sorts itself out. Just last week data showed factories in Britain stockpiled for Brexit at an explosive rate last month. It’s not too much of a leap to say that the companies that own these factories are betting on a major storm to hit the British isle, or even worse, think they’re already in one.
Through the mess, still no deal has been reached. If there is a hard crash out of the European Union, Goldman noted that UK GDP would fall substantially and that it would send economic shockwaves across the world, hitting its European trading partners the hardest. Germany and France would feel the brunt of the pain. As of yesterday, Mrs. May now has until April 12th to either seek a longer extension from the EU to take a different course or decide to leave the EU without a deal. The clock is ticking.