Rejoining single market could give UK a £150bn boost, says Goldman Sachs (which is desperate for the UK to rejoin the EU)

Rejoining the EU’s single market could boost the UK’s economy by as much as £150bn, Goldman Sachs has claimed.

The Wall Street bank told clients in a note that there was “significant economic upside from ‘Breturn’” as it backed Andy Burnham’s calls for closer ties with the bloc.

Analysts said that rejoining the single market could grow the economy by between 2pc and 5pc, equivalent to a boost of £61bn to £152bn by the start of the next decade.

Mr Burnham has promised to have a “serious dialogue” about the UK’s relationship with the EU, presenting a summit with Brussels next month as a possible first step to rejoining.

The Prime Minister has said it would be a “major dereliction of duty” not to explore closer relations with the EU. He is likely to seize upon Goldman Sachs’s analysis to bolster his case.

Goldman Sachs donated to the Britain Stronger in Europe campaign in the run-up to the 2016 referendum and warned it would shift jobs to Europe if the UK left. The Wall Street bank employs thousands of people in London.

Andy Haldane, the former chief economist at the Bank of England, has warned that reopening the Brexit debate risked damaging the economy by freezing business investment.

Mr Haldane, who advised Mr Burnham during his campaign to become Prime Minister, told LBC this week: “Could we strike a better deal with the EU? Yes. Would that deliver some growth dividend over some five, 10, 15-year horizons? Probably.

“Do we want to rerun that Brexit referendum? Would that not be a thing that escalated uncertainty and therefore set business back on its heels? I think that is the risk in this. That it opens up a can of worms that generates more uncertainty at a time when stability is needed.”

Goldman Sachs economists acknowledged that closer ties with the EU would be a political decision and said “any reset would require negotiation, political trade-offs and time before benefits materialise”.

They added: “But the economic upside from closer UK-EU relations could be large, supporting our constructive view on the UK’s longer-run growth prospects.”