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Euro collapse would benefit UK, research argues

A break-up of the eurozone would ultimately help the UK after the short-term pain of the event, according to a business thinktank.

Research by the Centre for Economics and Business Research says the demise of the currency bloc 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 thinktank concedes that the collapse could drive the UK back into recession, the following growth is likely to be stronger than before.

“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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