It’s hard not to worry about how a break-up of the Eurozone would affect all of us, but ultimately some believe it could help the UK after the short-term pain from the event. Enable, experienced independent financial advisors know that it often pays to take the longer term view.
Research by the Centre for Economics and Business Research says the demise of the European currency would drive down the UK’s GDP growth in the year following the event but argues that the overall consequences would be less severe than many commentators suggest.
The study predicts that within five years of the euro’s break-up, the UK would be “at least as well off” as it would be if the region survived its ongoing debt crisis intact. Although the ‘think tank’ concedes that the collapse could drive the UK back into recession, the following growth is likely to be stronger than before.
In its assessment of the cost of a euro break-up, the Centre for Economics and Business Research (CEBR) said the UK would experience a 0.5 per cent reduction in gross domestic product (GDP), based on GDP in the Eurozone contracting 2 per cent as a whole.
“If it breaks up the immediate pain is much more intense, but then there is a more stable basis and we would expect that within about 30 months growth will actually be faster than if the Eurozone survives in its current form,” states the CEBR.
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