According to a study carried out by Rabobank, a Dutch banking and financial services, has found that leaving the Single Market with no deal will cost the UK economy £400bn by 2030.
Equivalent to 18% of GDP, the findings serve as a warning to the UK after Theresa May urged the UK to prepare for no deal in her Brexit negotiations with the EU.
The study has found that without a trade agreement in place, the UK could lose up to 18% of its growth in the period, when compared to remaining in the EU.
Hugo Erken, a senior economist at Rabobank, said: “By looking at dynamics such as innovation, competition, knowledge and human capital, how they will change and what affects this will have on the structural makeup of the UK and European economy, our research shows that the long-lasting impact of Brexit is likely to be more severe than initially anticipated.”
Previous reports have also been economically bleak for the UK when it comes to Brexit, with a study finding that losing Single Market access could cost UK economy £36bn per year.
Using macro-econometric modelling, the study carried out by Rabobank researched Brexit in three separate scenarios; a hard Brexit with no trade deal, leaving with a new free-trade deal, and a soft Brexit where the UK leaves the customs union but remains in the single market.
The study found that leaving the EU with no transitional deal would put the UK into immediate recession, and result in a £400bn loss by 2030. The other two scenarios were also likely to lead to recession, but the report suggests the economic effects would be less damaging.