U.K. economy will be worse off after Brexit, leaked government report says

A forecast prepared for the British government reportedly says the economy will be worse off after the country leaves the European Union whatever trade deal is struck with the bloc.

The leaked assessment published Monday by news website BuzzFeed says if Britain reaches a free trade deal with the EU, growth over 15 years will be five per cent lower than current forecasts.

The document, dated this month, says if there is no deal and Britain resorts to World Trade Organization terms, growth will fall eight per cent. If Britain remains in the EU single market but as a non-bloc member, the decline will be two per cent.

The government did not challenge the authenticity of thedocument, but the country's juniorBrexitminister told Parliament on Tuesday that it is a selective interpretation of early researchand does not include Britain's desired outcome from the divorce.

"The article is a selective interpretation of a preliminaryanalysis; it is an attempt to undermine our exit from theEuropean Union," Steve Baker said of the report.

"It has not been led by my department, it is not yetanywhere near being approved by ministers even the ministerialteam in my department has only just been consulted on this paper, and we've made it clear that it requires significant furtherwork.

"It is there to test ideas."

Brexit: Can it be stopped with another referendum?

7 years ago

Duration 3:02

Progress on Brexit continues to move forward, but now there are rumblings about holding another referendum. The suggestion comes from an unlikely source: Nigel Farage the man who advocated for Britain's departure from the European Union. Still, with Brexit looming, people remain divided on whether to go through with it

Meanwhile, Britain'skey piece of Brexit legislation is starting a new battle in Parliament.

The House of Lords began scrutinizing the EU Withdrawal Bill on Tuesday, which is designed to convert thousands of EU laws into British statutes when the U.K. leaves the bloc in March 2019. Without it, Britain could face a legal black hole after Brexit. A majority of members of Parliament's unelected upper house oppose Brexitand will try to amend the legislation.

The government maintains that Britain will be able to strike newtrade deals around the world afterBrexitto replace any declinewith the EU. The leaked analysis says new trade deals with the U.S., China, India and other countries would boost growth, but not enough to make up for the lost revenue from the EU, currently Britain's biggest trading partner.

The report is the latest in a string of economists' predictions that leaving the EU will harm the U.K. economy. Supporters of Brexit point out that many such forecasts have so far not come to pass.

The document is likely to further inflame feuding within Britain's Conservative government, between those who back a clean break with the bloc and those who want to keep Britain's economy as closely aligned with the EU's as possible after Brexit in March 2019.