UK PM Burnham sows seeds of "Breturn" that could excite markets
NEVER mind Britain’s stretched budget numbers. The real surprise this week was new Prime Minister Andy Burnham’s push to re-engage with the European Union — including the possibility of rejoining.
The recent surge in Prime Minister Andy Burnham's commitment to re-engaging with the European Union (EU) has stirred considerable interest among markets. This shift could potentially benefit sterling assets due to the positive perception surrounding closer ties with the EU. Burnham, who previously advocated for remaining within the EU during the 2016 Brexit referendum, now argues that all options, ranging from closer relations to rejoining the EU single market, should be considered for his party and the broader public.
While the process to rejoin the EU could be lengthy, given the reluctance of EU governments to reopen accession talks and the vocal domestic opposition, the potential financial gains are significant. Economists estimate that Brexit has caused substantial harm to the UK, potentially lowering GDP by 4-8 percentage points over the long term. This analysis, supported by numerous polls indicating a high degree of public regret over Brexit, suggests that Burnham's proposal could be well-received by both the public and investors.
The potential benefits of rejoining the EU are clear, with economists emphasizing that Brexit has done more harm than good for Britain. With the anniversary of the referendum approaching, the economic impact of Brexit has become a widely studied topic, with estimates ranging from a 4-percentage-point hit to UK productivity to a long-term reduction in imports and exports by 15 percentage points.
Even the most optimistic scenarios suggest a cumulative GDP hit of up to 4 percentage points, not to mention the additional business and financial complications arising from renewed trade barriers and movement restrictions.
It's important to note that while the prospect of rejoining the EU is exciting for many, the reality is that this process could take many years and would require overcoming significant challenges. However, the shift in Burnham's stance, combined with the growing public sentiment against Brexit, could signal a pivotal moment for the UK economy and potentially serve as a bullish inflection point for sterling assets.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
