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BREXIT: Brexit to hit German growth, study says

The UK's plans to leave the EU will hit Germany's gross domestic product (GDP) and reduce exports, according to the Cologne Institute for Economic Research (IW).  26 Oct 2016

German GDP will be reduced by a quarter percentage point by the UK's plans, a report by the IW said, based on an assumed permanent 10% fall in the pound against the euro, and growth of only 0.5% in the UK, assuming a 'Brexit effect' of -1.5%, in 2017.

This would reflect a 9% fall in German exports to the UK, and a 3.5% fall in imports from the UK to Germany, IW said.

If the UK takes a 'hard' Brexit approach then the result is likely to be worse, with poorer trade rules, a drop of 0.5% in UK GDP, and a potential 20% fall in the pound against the euro leading to a 0.5% fall in German GDP. A softer Brexit plan could ease this to a 0.14% drop, it said.