But Mark Berrisford-Smith, Head of Economics at HSBC, said the extent to which exiting the EU would affect the economy depended on the deal – or lack of it – that was struck with Brussels.
He was speaking at an event with the Coventry and Warwickshire Chamber of Commerce’s Brexit Club, sponsored by HSBC, at Coombe Abbey and told businesses that there were other factors that ‘matter more’ than Brexit.
Berrisford-Smith said early indications that simply voting to leave had wiped around £25bn from the UK economy and that a ‘no deal’ scenario with the EU would bring further disruption.
He said: “The vote to leave caused a currency shock, the kind of which we’ve seen in the 1960s, 1990s and then again in 2008-09.
“A fair assessment is that the economy is roughly 1.25 per cent smaller and that’s around £25bn off GDP.
“It brought inflation but probably not as much as would have been expected. A ‘no deal’ Brexit would bring another currency shock and it really could get messy.
“A sensible deal with the EU, however, would probably strengthen Sterling.
“Brexit is a bit like asking a world class football team to play with an old-fashioned football from about 60 years ago. It wouldn’t be as easy, but if you have the necessary skills you can deal with it and your class would shine.
“There are lots of factors, however, that matter more than Brexit. The global economy is cooling and a trade war got underway on June 1.
“Tariffs from the USA were followed by tariffs from the EU and it’s a similar picture with China and the USA. It’s going to protracted and ugly.
“We don’t know how long it will last or how much damage it will do but it could tear up the very notion of the West. Wouldn’t it be useful if the Cabinet were going away to discuss the new Trumpian World Order rather than post Brexit customs arrangements?”
Berrisford-Smith was followed by Mike Spicer, Director of Research and Economics, for the British Chambers of Commerce (BCC).
He said the BCC had been working hard to ensure that the Government understood the needs of business – from small companies right through to large multi-national corporations.
Spicer then joined a panel session with David Hooper, of Independent Freight Solutions; Yemi Alli, of Alsters Kelley Solicitors; and Ananth Krishnan, of HSBC; before the event was closed by Ian Coulson, of HSBC.
David Burton, chairman of the Chamber’s Brexit Club, said: “We are grateful to HSBC for sponsoring the event and to our panellists for providing great insight.
“The Coventry and Warwickshire Chamber of Commerce was very quick off the mark in setting up this club to help support our members and provide information and assistance as we move towards the exit – whenever that may be!”
The Chamber have produced a Business Brexit Checklist to help companies scenario plan and prepare for Brexit, covering topics such as trade, customs, workforce and taxation issues. For further information, go to www.cw-chamber.co.uk or contact the Chamber on 024 7665 4321.
Pictured (left to right): James Ahearne, Alan Durham, Mike Spicer, David Burton, Mark Berrisford-Smith, Yemi Alli, David Hooper, Ian Coulson
