Britain faces '10-year economic shock' after Brexit vote

Staff reporter(wp/es):

The UK suffered a “profound shock” following the country’s vote to leave the EU which looks set to result in a slowing economy, ageing population and technological transformation, a think-tank said.

Britain’s move to leave the EU will see living standards in the UK drop, a report by centre-left group IPPR warned.

At the same time a rapidly ageing population - with the numbers of people aged 65 and over predicted to rise by a third by the end of the next decade - will impose new strains on the state.

The funding gap for adult social care is expected to hit £13 billion by 2030/31.

In the workplace, "exponential" improvements in new technologies such as artificial intelligence systems and machine learning will put two-thirds of current jobs - 15 million - at risk of automation.

The report predicts work is likely to become more insecure and more freelance while inequality is set to increase sharply with the income of high-income households forecast to rise 11 times faster than for those on low incomes.

"Brexit is the firing gun on a decade of disruption," the report said.

"Even as what we do and how we work changes, the UK is likely to remain trapped in a low growth, low interest rate decade driven by demographic shifts, productivity trends, weak investment, weak labour power, high levels of debt, and the headwinds of a slowing global economy.

"Without reform, our political and social system will struggle to build a more democratic, healthy society in the decades ahead, even as Brexit accelerates us towards a radically different institutional landscape."

Lib Dem Treasury spokeswoman Baroness Susan Kramer said: "The report is a devastating indictment of the Conservative Government's hard Brexit strategy.

"In the face of huge global challenges, the Conservative response is to haul up the drawbridge and hope that the future will go away. It won't.

"Many of the huge international challenges identified in the report are more effectively faced working with our European friends, and within the single market."

A Government spokesman said: "The British people voted to leave the EU and we are committed to delivering on that instruction and making it a success.

"We have been clear that we are seeking a bespoke arrangement for the UK - one that gives British businesses the maximum freedom to trade with and operate in the single market but also allows us to make our own decisions on immigration. 

"While there may be challenges ahead, we approach them from a position of strength. Since 2010, we have cut the deficit by two thirds, created 2.7 million jobs and this year the UK is forecast to be the fastest-growing major advanced economy.

"We now have an opportunity to forge a new role for ourselves in the world and we will do so with optimism, making a success of Brexit and building an economy that works for all."