The volume of goods and services would be £197 billion lower outside the EU, a report says, even if the government could sign agreements with the EU, the US, China, Russia, Canada, New Zealand and Australia

A free trade deal with the United States would not come close to making up for the loss of the single market even if combined with agreements with the EU and other big economies, a study says.

The volume of goods and services would be £197 billion lower in the long-term outside the EU, a report says. That is on the optimistic assumption that the government could sign agreements with the EU, the US, growth economies including China and Russia, as well as Canada, New Zealand and Australia.

Monique Ebell, author of the study for the National Institute of Economic and Social Research, said her research gave an even starker view of Britain’s post-Brexit prospects than the Treasury’s pre-referendum forecast that painted a rosy picture