An EU deal ‘won’t mean a quick restart for the UK economy’

Britain’s economy will take years to recover from the uncertainty that has seen companies abandon investment plans and move headquarters abroad, economists warned this weekend.

Dashing hopes that a deal with the EU would mean a new start for business, economists said weak global growth and employers shifting from the UK could see recovery delayed until well into the next decade.

The Japanese car maker Nissan said last week that a no-deal Brexit would put in jeopardy its UK factory and 30,000 jobs, most in the north-east.

A deal like the one believed to have been proposed by the prime minister last week would also harm manufacturers, according to a letter sent to the government by representatives of five sectors. The aerospace, automotive, chemical, food and drink and pharmaceutical industries, which employ 1.1 million people between them, warned that Boris Johnson’s apparent decision to drop commitments to EU regulatory institutions posed a “serious risk to competitiveness”.

In a letter seen by the BBC, the five representatives told Brexit secretary Steve Barclay and Cabinet Office minister Michael Gove of the “damage which would be done by the current approach on regulatory divergence”.

Gross domestic product is between about 2.5% and 3% (£55bn and £66bn) below where it would have been without Brexit, according to the Institute for Fiscal Studies.