KPMG is predicting Brexit could potentially cost the UK economy 2.9% in 2021, bringing GDP growth down to 7.2% next year.
The financial services and manufacturing sectors are estimated to still be down 10% by the end of next year in comparison to pre-Covid levels, with the economy not expected to return to post-Covid levels until the end of 2022.
The economic hit of the current national lockdown is expected to be relatively mild, with GDP falling 2% in the final quarter of 2020.
The firm’s analysis assumed a “slimmed-down” Brexit deal will be agreed to by the end of the year and that a vaccine will be rolled out in early 2021.
Yael Selfin, chief economist at KPMG UK, said: “The impact of Brexit will single the UK out among advanced economies next year.
“While the Government will need to address the short-term needs of businesses as they cope with the transition to a new trading relationship, it is also important that it increases investment in the infrastructure and skills that will be needed in order to alleviate the longer-term impact Brexit will have on productivity and growth.”