The election uncertainty will give way to new uncertainties. Two new reports from the Centre for Economic Performance (CEP) at the London School of Economics highlight some of the dangers. On immigration, the CEP concludes that cutting it significantly will result in a lowering of living standards for the UK-born population, with the extent of the fall depending on the extent of the drop in net migration. The May target of “tens of thousands” will leave us all poorer. The report, on the CEP website, is a good mythbuster. Areas of high EU immigration have not seen UK-born workers displaced or suffered from weaker wage growth. The route to reduced living standards is partly via the fact that migrant workers pay more in taxes than they take out in welfare and use of public services. The CEP’s other report looks at something that really worries businesses — the prime minister’s “no deal is better than a bad deal” rhetoric. CEP economists Swati Dhingra and Thomas Sampson, using what they describe as a state-of-the-art trade model based on comprehensive data, say that leaving the EU without a deal would result in a 40% drop in exports to the EU over 10 years and a 3% fall in GDP per capita. Add in dynamic effects and the medium-term economic effects could be double those arising from the model, the authors say.

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