How damaging is Brexit likely to be for Britain's economy?

Paul Krugman doesn't see economic catastrophe as a likely result of Brexit (What to Expect When You’re Expecting Brexit New York Times 01/16/2019):

This wouldn’t be the economic deliverance some Brexiteers envisioned, but maybe the more important point here is that the effects of Brexit after a few years have passed don’t look catastrophic. How confident can we be that it wouldn’t be too bad? Quite confident, because other countries have managed decently without customs unions despite close economic ties to a much larger neighbor.

Put it this way: A post-Brexit U.K. would be to the E.U. pretty much as Canada was to the U.S. before the U.S.-Canada Free Trade Agreement (which came a few years before NAFTA.) In fact, even the share of cross-border trade in G.D.P. would be similar. And Canada wasn’t a howling wasteland.

This doesn't mean that he thinks Brexit is a sensible or desirable thing, or that it won't have negative economic consequencies. "However, while the long-run effects of Brexit would probably be moderate (although 3 percent of G.D.P. is actually a big deal compared with the effects of most economic policies), the short run could be much worse - both for Britain and for the E.U." (my emphasis)

Obviously, a final Brexit agreement hasn't been reached yet. But the options have narrowed to basically the EU's offer or a no-deal Brexit. Former Greek Finance Minister Yanis Varoufakis has some experience negotiating with the EU. And he recently assessed Britain's options in the remaining negotiations, Run Down the Brexit Clock Project Syndicate 01/16/2019.

This is also an interesting a plausible observation about the EU's negotiating strategy:

... we should also note the fantasies of the Eurocrats, who have behaved at every step of this process as if Britain were Greece, and could be bullied into capitulation. Minor gestures could have saved Remain in 2016; a bit of flexibility, a bit less determination to impose humiliating terms, might have led to a soft Brexit now. But it was arrogance all the way."

And none of this should divert attention from how demagogic and reckless the claims of the Leavers have been. Simon Wren-Lewis writes (Why the UK cannot see that Brexit is utterly, utterly stupid Mainly Macro 01/28/2019):

... what is really remarkable is the way what this vote was for has gradually mutated over time. Just before the vote, the Leave campaign talked of many ways of leaving, with Norway (which is in the EEA) as one option. They did this for a simple reason: every time Leavers came up with a feasible way of leaving other Leavers did not like it. Yet within little more than a year Leavers were declaring that the vote was obviously to leave both the Customs Union and Single Market. During the referendum campaign the Leave side talked about the great deal they would get from the EU, but within two years many of the same people were seriously pretending that voters really wanted No Deal. A vote for the ‘easiest’ deal in history has become a vote for no deal at all, apparently.

In much the same way, as Alex Andreou notes, what was once described as Project Fear transforms in time into ‘the people knew they were voting for that’. Claims there will be no short term hit to living standards made before the referendum has now become people knew there would be a short term cost. (Remember Rees-Mogg told us that short term means 50 years.)

Meanwhile warnings from important UK businesses become an excuse to talk about WWII, yet again. What people from outside the UK can see that too many inside cannot is how the case for Leaving has become little more than xenophobia and nationalism. [my emphasis]

Kojo Koram has an intriguing look at the evolution of Brexit nationalism, Britain's Blindness Dissent 02/06/2019:

Brexiteers are trying to convince the public that a no-deal Brexit is not a crisis but actually an opportunity for national liberation. ...

Understanding the sacrifice underpinning national liberation provides a glimpse into the mindset of Brexiteers currently exploiting this rhetoric. As the UK prepares for post-Brexit hardship, experts trying to warn of the economic disruption that would follow a no-deal crash must understand that their warnings are not only being dismissed as “project fear” but also being reframed by Brexiteers as a “a blessing in disguise,” with a no-deal crash being presented as an opportunity for the “suffering which would unite & bring us together.” The Brexit argument once promised that Britain would immediately be showered in wealth if it left the EU, but now the Times is publishing articles arguing that “Brexit offers a prized return to the Blitz spirit.” Those confused by such statements need to recognize that a period of post-Brexit suffering in order to get to a glorious future is actually desired by some Brexiteers, an almost libidinal longing for the chance for Britain to prove it’s resilience by exhausting the EU’s capacity for pain. [Brexiteer Nigel] Farage recently wrote how “a WTO deal with tariffs on both sides would, on the face of it, be a very bad deal for Brussels” and if Britain could withstand the turmoil that might follow, external pressures on the EU, such as the upcoming European elections, would force the Europeans to eventually capitulate and allow Britain to exit the EU on its own terms.