Policy analysis from the Centre for Economic Performance
CEP BREXIT Analysis
The Local Economic Effects of Brexit
Swati Dhingra, Stephen Machin and Henry G. Overman
Paper No' CEPBREXIT10:
This paper studies the local impacts of the increases in trade barriers associated with Brexit. Predictions of the local impact of Brexit are presented under two different scenarios, soft and hard Brexit. Average effects are predicted to be negative under both scenarios, and more negative under hard Brexit. The spatial variation in shocks across areas is somewhat higher under hard Brexit because some local areas are particularly specialised in sectors that are predicted to be badly hit by hard Brexit. Areas in the South of England, and urban areas, are predicted to be harder hit by Brexit under both scenarios. Again, this pattern is explained by the fact that those areas are specialised in sectors that are predicted to be badly hit by Brexit. Finally, the areas that were most likely to vote remain are those that are predicted to be most negatively impacted by Brexit.