Pro-EU Think Tank Trims Cost of Brexit Vote for U.K.’s Economy

(Bloomberg) -- The U.K.’s better-than-expected economic growth last year prompted a pro-European think tank to trim its cost estimate for voting for Brexit.

The U.K. economy was 2.3 percent smaller in the third quarter than had the country voted in 2016 to remain in the European Union, according to the Centre for European Reform, a 0.2 percentage point cut from the prior three months. The estimate means a weekly hit of 320 million pounds ($422 million) to public finances, or 17 billion pounds a year, the group said.

The economy grew at the fastest pace in almost a year from May to July last year, rising 0.6 percent and beating economists’ forecasts as U.K. construction output rebounded and a heatwave boosted retail sales and the services sector.

Despite reducing the cost of Brexit, the think tank didn’t shift its position on the U.K.’s EU departure. The “basic story is unchanged: Britain’s decision to leave the EU damaged growth, largely thanks to higher inflation and lower business investment,” it said Sunday.

The center, based in London and Brussels, describes itself as a “pro-European but not uncritical” think tank.

To contact the reporter on this story: Ben Stupples in London at bstupples@bloomberg.net

To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Steve Geimann, Chris Vellacott

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