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Abstract:

External publication
Trading places
Josh De Lyon, Swati Dhingra, Sophie Hale and James Smith
October 2021
Paper No' :
Full Paper (pdf)

Tags: economy2030; immigration; brexit; policy;

This briefing note is the launch paper for the Brexit research theme of The Economy 2030 Inquiry, a joint project between the Resolution Foundation and the London School of Economics, funded by the Nuffield Foundation. It outlines how trade shapes, and is shaped by, wider changes to the economy, defining the nature of jobs for millions and - most importantly - influences long-term prosperity. Overall, our findings demonstrate that major shifts in the level and nature of openness have big direct impacts on people, places, and firms, but they are also intertwined with the overall economic strategy of the country. The direct effects of Brexit on trade flows and prices have started to emerge, although the impact has been clouded by the effect of Covid-19. But the longer-term impact on the nature of the UK's economy largely remain ahead of us. The current policy and political debate is preoccupied with the individual trade deals that the UK can now pursue. This risks leaving the country without a plan for the major economic change that Brexit is already starting to bring about. Now is the time to ask the most important questions about our future: how open the UK should be; whether to maintain the existing economic strategy, or change it; and how the UK should position itself in a world trading system dominated by three interconnected but competitive trading blocs. Answering these questions about the future will shape what policy makers must do today to avoid further relative declines of UK living standards.