72 BILLION: The cost of Brexit is already turning Britain into a second-rung nation

Brexit will cost Britain 72 billion in lost economic activity annually, according to an analysis of government figures.Leaving the EU is already dragging down the British economy.The UK is now growing more slowly than Japan or Italy.LONDONChancellor Philip Hammond's annual budget, presented yesterday, has finally givenBritain the first concrete numbers on the cost of Brexit.The government's Office for Budget Responsibility published revised GDP growth numbersbased on data following the June 2016 referendum. Those new estimates suggest that Brexit will cost Britain 72 billion in lost annual economic activity by 2021, according to an analysis by the Resolution Foundation.Previously, the best estimate of the economic damage leaving Europe will inflict on the UK came from a private estimate by one of Secretary of State for Exiting the European Union David Davis's advisors, of about 22 billion per year, mostly from extra trade tariffsand barriers.Here are the new GDP charts from the OBR.They showother major economies such as the US, the EU, andCanada all growing faster now than they were in the six months prior to the Brexit referendum in 2016. Only in the UK has growth slowed, as the pound lost value and investors hit the pause button. Even Japan, an infamous economic basketcasehobbled by years of stagnation, is doing better than the UK:In terms of sequential GDP growth through Q3 2017, Britain now lags France and debt-ridden Italy, too.This chart of OECD data comes from Michael Baxter of Share Centre:This next chart shows how much we are forecast to lose in GDP activity every year, based on the difference between the OBR's previous estimate in March and its new estimate,from updated post-referendum data:The Resolution Foundation says the gapwillrepresent a loss of 72 billion in 2021:"The economy is now expected to be roughly 42 billion smaller at the start of 2022 than was thought back in March. This downgrade comes on top of the deterioration pencilled in after the Brexit vote of June 2016. As such, the latest GDP projections point to an economy that will be 72 billion (or 3.4 percent) smaller in 2021 than had been projected in March 2016."That's 72 billion in lost jobs, revenues, consumer spending, and so on.There are other factors at play, of course. A big one is the UK's chronic lack of productivity, exacerbated by its refusal to allow in the young immigrant workers to generate the income tax receipts its ageing population needs to pay for theNHS and its state pensions.But the OBR's downward revisions from March to November of this year all come in the post-Brexit-vote period, and the only thing of macroeconomic substance that changed between then and now was the realisation that the UK is headed toward hard Brexitrather than a trade deal that would keep the country closely tied to the single market.Join the conversation about this storyNOW WATCH: The world's largest pyramid is not in Egypt
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