UK Labour Party leader Jeremy Corbyn, October 10, 2019. Picture: AFP/OLI SCARFF.
UK Labour Party leader Jeremy Corbyn, October 10, 2019. Picture: AFP/OLI SCARFF.

London — Remaining in the EU could give the UK economy an £85bn boost compared with a no-deal Brexit, according to Bloomberg Economics.

The calculations, based on Jeremy Corbyn’s Labour Party offering a second referendum that leads to the nation staying in the bloc, demonstrate how the Brexit process has turned the usual norms in the UK on their head. Economists and investors are warming to the prospect of a left-wing lawmaker who favours nationalisation of some industries and stronger worker protections.

While optimism over a Brexit deal has increased this week, the UK could still face an election soon, raising the choice between an explicit pledge of no deal by Prime Minister Boris Johnson, and Corbyn’s promise to offer a second referendum between remaining in the EU and an as-yet unnegotiated deal.

“For the economy, these two scenarios are a world apart,” Bloomberg Economics’ Dan Hanson wrote in a report Friday.

Under no deal, Bloomberg Economics predicts the UK economy will see cumulative growth of 5% between 2019 and 2023, which rises to 7.5% if the UK votes for a renegotiated deal — along the lines of a customs union — in a second referendum in 2020.

A vote to remain then would see the economy expand by 9% more over the period, with the difference between that scenario and no deal at £85bn.

Bloomberg Economics’ calculations assume the Labour leader would only gain power as part of a coalition, curtailing some of his more radical ambitions.

Bloomberg