OECD Advocates 'closest Possible' EU-UK Relationship
Sumaira FH Published October 17, 2017 | 04:05 PM
Britain should seek to maintain close economic ties with the European Union to weather the impact of Brexit, the OECD said on Tuesday
London, (UrduPoint / Pakistan Point News - 17th Oct, 2017 ) :Britain should seek to maintain close economic ties with the European Union to weather the impact of Brexit, the OECD said on Tuesday. The Organisation for Economic Co-operation and Development left its growth forecasts for Britain unchanged from its previous prediction of 1.6 percent in 2017 and one percent in 2018.
But Britain's planned departure from the EU has worsened the country's existing productivity problem by increasing uncertainty and reducing business investment, said the Paris-based OECD, which advises industrial nations on economic policy.
Reviving the growth of labour productivity is a challenge "compounded by Brexit", it said, and exiting the EU could reduce total factor productivity by about three percent after 10 years due to reduced trade.
The organisation also warned that a "disorderly Brexit", one in which no trading relationship is arranged, would constitute a medium-term shock to Britain's economic growth prospects. "Business investment would seize up, and heightened price pressures would choke off private consumption," the organisation said in a report.
"Negotiating the closest possible EU-UK economic relationship would limit the cost of exit." Britain voted to leave the EU in a June 2016 referendum. It is due to exit the bloc in March 2019. A decision to stop Brexit would have a positive impact on the British economy, the OECD claimed.
"In case Brexit gets reversed by political decision (change of majority, new referendum, etc), the positive impact on growth would be significant," the report said. Ahead of British finance minister Philip Hammond's annual budget on November 22, the OECD also said that the Treasury has a buffer of 1.25 percent of gross domestic product relative to its structural deficit target of two percent of GDP.
It recommended investment targeted at increasing productivity, such as "spending on repair and maintenance or soft investment" if growth weakens further ahead of Brexit. Hammond highlighted the issue before the Treasury parliamentary scrutiny committee on Wednesday, saying: "we do have a fundamental underlying problem about productivity growth in the UK economy".
"The UK distinctive issue is regional disparity," he added.
Related Topics
Recent Stories
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 7 May 2024
Today Gold Rate in Pakistan 07 May 2024
Sharjah Animation Conference explores cross-cultural collaboration opportunities ..
Sharjah Public Library provides countless opportunities for young imaginations t ..
Sharjah Police launches 'Your belongings, your responsibility' awareness campaig ..
Dubai Police displays Innovative Tourism Security Services at 'ATM 2024'
Mohammad Haris, Aamir Jamal not part of national squad for Ireland, England: Bab ..
Erdogan opens former church to Muslim worshippers
Cultural events hallmark of a nation, Director RAC
Iraq hangs 11 convicted of 'terrorism': security, health sources
Stocks rise on renewed hopes of rate cuts
PM assures all-out support to Saudi investment
More Stories From Business
-
Foreign exchange rates
7 minutes ago -
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 7 May 2024
42 minutes ago -
Today Gold Rate in Pakistan 07 May 2024
1 hour ago -
Stocks rise on renewed hopes of rate cuts
11 hours ago -
Seminar organized to mark World IP Day
11 hours ago -
Curbing illicit trade, counterfeiting crucial for Pakistan's economic renaissance: TRACIT
11 hours ago
-
SARVP of WB meets Minister for Finance
11 hours ago -
Peace vital for sustainable development: Ahsan Iqbal
12 hours ago -
'Students should be equipped with modern education to gear up socioeconomic uplift'
12 hours ago -
'Tajir Dost Scheme's application introduced'
12 hours ago -
Efforts on for producing skilled manpower: Ch. Shafay
13 hours ago -
World Bank delegation calls on Shaza Fatima
14 hours ago