Brexit-proof! Project Fear’s ‘wildly exaggerated’ claims proved wrong, top economist says

Julian Jessop – who calls himself a “sensible Brexiteer” – spoke as the first set of data from the Office for National Statistics (ONS) for 2021 was released this morning. It covered the first quarter of the year – when many Covid restrictions were still in place – and the economist said showed any negative impact Brexit had created on the UK’s lucrative service sector was “small”.

Writing in the Telegraph, the economist said: “In contrast to the sharp fall in trade in goods between the fourth quarter of last year and the first quarter of 2021, trade in services held up relatively well.

“The continued impact of Covid restrictions, especially on international travel, has had a far larger impact.

“Second, trade in services with the EU has fallen by more than trade in services with the rest of the world.

“This may partly be due to Brexit. But the difference lies almost entirely on the imports side, not UK exports to the EU.”

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This is despite the capital losing its top spot in European equity trading to Amsterdam, he added.

“Breaking free from EU regulations should bring more benefits in future,” he explained.

“In the meantime, many business surveys indicate that the Brexit hit has faded in the second quarter, and that it is expected to ease further.

“To be clear, anything that increases barriers to trade between the UK and the EU is a loss to both sides, whether it reduces UK imports or exports.

“The fall in imports from the EU has also only been partly offset by an increase in trade with the rest of the world.

“Nonetheless, like so much of ‘Project Fear’, the warnings that Brexit would wreck the UK’s international trade in services are turning out to be wildly exaggerated.”

Earlier this month Mr Jessop again spoke about the “positive realities” of leaving the EU.

He tweeted: “The UK economy took a hit in January at the end of the transition period, but the fall in #GDP was mainly due to new Covid restrictions.

“Since then, activity has recovered more quickly than most (incl. the OBR) had expected.”

The Office for Budget Responsibility (OBR) is an independent official body which monitors the country’s economy and makes forecasts about future growth.

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