London Mayor Sadiq Khan claims Brexit's cost to UK exceeds $178 billion

London Mayor Sadiq Khan has asserted that Britain's departure from the European Union has inflicted a significant economic toll, reducing the country's economy by 6 per cent so far - equating to an annual cost of £140 billion ($178 billion).

This is based on a Reuters report.

The mayor, a vocal critic of Brexit from the Labour Party, referred to a report commissioned from economic consultants Cambridge Econometrics.

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The report estimates that the economic impact could deepen to a 10 per cent reduction by 2035, signalling a substantial setback for the UK economy.

Reuters cited a released statement, wherein Mayor Khan expressed his concern about the economic consequences of the chosen Brexit path, stating, "It's now obvious that Brexit isn't working. The hard-line version of Brexit we've ended up with is dragging our economy down and pushing up the cost of living."

The Labour Party, led by Keir Starmer, holds a considerable lead over Prime Minister Rishi Sunak's Conservatives ahead of an anticipated election later this year.

However, the party has been cautious in detailing its plans for strengthening ties with the EU.

Cambridge Econometrics, the economic consultancy behind the report, estimates the costs of Brexit to be higher than some recent analyses.

Contrasting with the National Institute of Economic and Social Research (NIESR), which estimated a 2-3 per cent reduction in the size of the economy in November, Cambridge Econometrics suggests a 6 per cent decrease.

The impact is expected to intensify, reaching 5 per cent-6 per cent by 2035.

The bank of England policymaker, Jonathan Haskel, had privately estimated that Brexit could lower GDP by 1.3 per cent by the end of 2022, equivalent to £1,000 per household annually.

The repercussions of Brexit, complicated by the onset of the COVID-19 pandemic shortly after the UK formally left the EU in January 2020, continue to shape economic trends.

The economic consultancy further forecasts that Brexit will lower annual economic growth by 0.4 percentage points between now and 2035, result in a reduction of 3 million jobs, and lead to a one-third decrease in investment.

(With inputs from Reuters)