Brexit costing UK £6.6bn in economic activity per quarter, says S&P

Brexit has cost the United Kingdom £6.6bn per quarter since the referendum, said a report from S&P Global Ratings which estimated the damage of the UK's decision to exit the European Union.

The report stated that the clearest effect of Brexit, which it says is causing widespread damage despite Britain still not having left the EU, was the detrimental effect on the pound sterling, which has triggered a rise in inflation and curtailed household spending power.

Boris Glass, senior economist at S&P Global Ratings, said: "We estimate that, had the UK not decided to leave the EU in the 2016 referendum, its economy might have been about 3% larger by the end of 2018. That translates into average forgone economic activity of £6.6bn in each of the 10 quarters since the referendum."

The report, which was assembled using the econometric approach known as the Doppelganger method, said growth rates would have averaged about 0.7% without Brexit, rather than the 0.43% achieved since the vote.

It added that net external trade did not see any significant boost, while businesses are struggling from a lack of investment.

"Uncertainty over the shape and form Brexit will take has increasingly paralyzed any forward-looking decision making. This is reflected in particular in a contraction of business investment in 2018," said Glass.

The report added that some businesses have reorganized their structure to comply with regulation and to safeguard unimpeded EU market access, which will dampen growth while the economy adjusts to the new business environment after Brexit, whether there is a deal or not.