UK PM Burnham sows seeds of ‘Breturn’ that could excite markets
EWU•Prime Minister Andy Burnham said rejoining the EU, including its single market, would be among options for Britain to consider. The article says the move could eventually affect sterling assets, while UK GDP estimates of Brexit’s cumulative impact range as high as 6-8 percentage points.
1. Rejoining back on table
At the Labour Party’s annual conference, Burnham said options for Britain’s long-term relationship with the EU could range from closer ties to rejoining the single market or reapplying for membership. He reiterated in interviews that reversing Brexit was among the possibilities.
2. Economic impact estimates
The article cites estimates of Brexit’s cumulative effect ranging from a 4-percentage-point hit to UK productivity to a long-term 15-percentage-point reduction in imports and exports. One estimate puts the potential impact on British GDP at 6-8 percentage points; a more benign comparison puts the cumulative GDP hit at as much as 4 percentage points.
3. Markets and public opinion
Burnham’s speech initially produced no major market reaction, while sterling rose on Tuesday after an upgrade to second-quarter GDP estimates. Polls cited in the article found 55% viewed Brexit as a wrong turn and separate surveys found 52% to 55% favoured rejoining or reapplying for EU membership.
