This new report by Policy Exchange sets out how the models of the impact of Brexit on UK exports used by the Office of Budget Responsibility (OBR) are greatly exaggerated – and that the real impact is only a small fraction of what has been assumed.

Unlike most previous models, the report analyses trade sector by sector, rather than via aggregate data. It finds that most previous analyses suffer from five major flaws:

• A reliance on volume metrics that take no account of shifts in value;
• A failure to appreciate the impact of global downturns in auto and aerospace;
• The continued inclusion of re-exports in before/after comparisons;
• A failure to appreciate the UK’s pre-Brexit underperformance in EU markets; and
• Not recognising that some of the UK’s most advanced engineering exports are now sold as services.

The report argues that those saying the UK must choose between the United States and Europe are making an unnecessary choice, and that the UK should seek to retain positive and open trading relationships with both.

In a Foreword endorsing the report, former Chancellor Rt Hon Jeremy Hunt MP – who campaigned for ‘Remain’ in the 2016 Brexit Referendum – says: “…this excellent paper by Policy Exchange clearly demonstrates that Brexit has had much less impact on British exports to the EU than has been previously thought.”