A post-EU-UK deal to sell UK goods at a discounted price on the internet is a “catastrophe” for consumers, according to a new study by academics.
The report, by research firm Demos, says the “noise” from the Brexit deal, which has left thousands of UK workers on the job, could cause “cataclysmic” disruption to businesses.
In its latest survey, the company found that the vast majority of UK retailers believe the Brexit vote to leave the European Union will result in a “lost decade” for UK consumer spending.
This means a “significant” loss in sales, said Demos.
“The impact will be profound for consumers,” the report said.
“Even in the unlikely event that we remain in the EU, this will have significant impact on UK business.”
In the longer term, we believe that the disruption will have a significant impact in terms of economic activity, job creation and social cohesion.
“The report said the majority of retailers surveyed by the firm believe the fallout from Brexit will cause a “loss in UK business”, with the majority also believing that a loss in consumer spending will have the biggest impact on the UK economy.
The study found that 68 per cent of retailers believe that consumers will lose confidence in the financial services sector, while just 30 per cent expect that to be a “small” impact.”
This will have implications for the retail sector and consumer confidence,” the study found.”
It is a massive blow to businesses that rely on a large and growing part of the UK’s economy.
“The study said that the loss in business will “likely result in reduced retail margins” and lead to a “huge reduction in sales”.
The study also found that “most” retailers believe it will be a huge economic blow to the UK if they leave the EU.
It also found 59 per cent believe that a “large and growing” share of the economy will “collapse”, which will mean “a loss of around 30,000 jobs in the UK”.
In total, 59 per, 78 per, 82 per, and 81 per per per cent respectively believed the loss of the financial sector would be “very bad” for the UK.
The survey also found:”If the UK were to leave Europe, it will have an impact on consumer spending”, the study said.
It said that if the UK left the EU “without a deal, it is likely that the consumer spend will fall by around £1,000 per year”.”
This is because there is a big impact on sales,” the research said.
The “noisiest of the noisier” retailers were those that sell “excessively” to foreign markets, such as the US and Australia.
However, it said that it was not clear that “this would be a significant issue” for businesses, which are still planning for the potential loss of a major part of their business.
The UK’s Prime Minister has pledged to keep the UK in the European Economic Area (EEA), which gives the UK the right to sell goods and services to the EU without tariffs or other restrictions.
The country was expected to begin selling goods in March 2019, but this has now been delayed until the end of 2021.
Demos’ survey also showed that the majority (63 per cent) of UK-based retailers expect Brexit to result in “a significant reduction in retail margins”, with only a quarter of those surveyed believing this would have a “tiny” impact on their business models.”
These findings raise serious questions about the ability of the [UK] Government to deliver on its commitment to keep our businesses in the single market,” said Demo CEO Ian Binnie.”
For businesses that have invested in the industry, the loss will have devastating implications.
“While many have taken the opportunity to invest in their UK businesses, others are concerned that the uncertainty created by Brexit could lead to the collapse of their businesses.”
In terms of consumers, the report found that over 70 per cent believed that the “lost years” will be “significant”, with nearly half of respondents saying the impact will have “an impact on social cohesion”.
“These are people who have come to rely on UK services and are concerned about social cohesion,” the researchers said.
They also said that, if the “remain” vote was accepted, the UK could “go on to lose the benefits of the Single Market, as the EU does not guarantee free movement of goods, services and people”.
“The result will be that a significant number of British citizens will lose the chance to work and study in Europe, and many will have no choice but to go back home.”