Brexit stockpiling could make a mini recession next year 'almost inevitable' for the UK - Finance

Brexit stockpiling could make a mini recession next year ‘almost inevitable’ for the UK – Finance


  • Analytical Center CEBR: Enterprises will store goods worth 38 billion pounds sterling on the eve of Brexit.
  • This will lead to a short-term increase in GDP growth in the UK, but after Brexit this will be canceled, as companies will reduce their reserves.
  • "This makes the mini-recession after Brexit almost inevitable," said the head of CEBR.

LONDON – The stocks of companies on the eve of Brexit will make the mini-decline in the UK "almost inevitable" next year, according to the head of the UK think tank.

The Center for Economic and Business Studies (CEBR) estimated on Monday in a briefing that British companies will store goods worth 38 billion pounds sterling on the eve of the deadline set in March 2019.

As expected, stockpiling will be observed, as enterprises will look at the possibility without a deal with Brexit, which will see the collapse of the UK from the EU without an agreement on future trade agreements.

According to CEBR estimates, this accumulation in three quarters by March 2019 will increase the UK's GDP by 0.5%. But GDP growth should fall by the same amount immediately after Brexit, as companies seek to reduce the reserves they have accumulated.

Douglas McWilliams, founder of CEBR, said in a note: "This makes the mini-recession after Brexit almost inevitable."

The prospect of a lack of a deal Brexit has been focusing more and more in the last few months, as the government has recognized that this is a growing opportunity and sets out plans to eliminate it.

British international trade Liam Fox said in an interview last month that the chance without a Brexit deal rose to 60%. Subsequently, the government published a number of documents that described how an unbiased Brexit deal would affect various sectors.

"In governmental documents on the influence of" No Brexit deal, "a potential violation was revealed – difficulties in obtaining medicines, sandwich components and various other products," Mc Williams wrote.

"But one of the most serious causes of destruction, of course, will be raw materials and semi-finished products. Of the 260 billion goods imported from the EU last year, about 100 billion pounds sterling fall into these two categories. "

McWilliams added that CEBR reserves estimates are based on "anecdotal evidence, interviews and intuition," since "it is difficult to find an equivalent episode for Brexit that can be used to test past experiences."

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