Hard Brexit could cost UK billions

LONDON

A so-called hard Brexit that takes the U.K. out of Europe’s single market as well as the EU could cost the country 38 billion pounds ($48.4 billion), a study published Wednesday has found.

The report commissioned by TheCityUK, a financial think tank, raised fears that Britain’s exit negotiations from the European Union could have a lasting and detrimental effect on the U.K. economy.

It warned up to 75,000 jobs could be lost in the lucrative finance sector in the worst case scenario, i.e. one in which the U.K. exits the EU’s single market and trades with the bloc based on the most basic World Trade Organization regulations.

This hard Brexit scenario might be pursued if Britain seeks to reintroduce full immigration controls for EU citizens, because EU leaders say member states within the single market must accept its rules on free movement of people and goods.

But the report added tax revenues would be severely reduced even if the U.K retains some connection with the single market.

Some industry experts fear whole businesses will leave London and move to other European capitals including Amsterdam, Dublin and Paris.

Britain voted to leave the European Union by a 52-48 percent margin in a referendum on June 23. Immigration was a key factor for many who voted to leave.

Exit negotiations will not begin until the country triggers Article 50 of the Lisbon Treaty, the formal mechanism for leaving the EU, although U.K. Prime Minister Theresa May has said this will not happen until early 2017.

Report author Hector Sants said: “It is in everyone's best interests for there to be a positive outcome to the negotiations that is mutually beneficial to the UK and the EU, causes minimum disruption to the industry and benefits customers who have come to rely on the

UK as a uniquely skilled and connected ecosystem for financial services.”