Just before Britain's fateful referendum on its membership in the European Union 10 years ago, the government of the day gave a stark warning: a vote to leave the bloc would lead to 'an immediate and profound shock' to the economy. By a slim margin, the public voted to leave, and a decade later, analysts say the economic impact has been significant.
According to a 2024 report from the Centre for European Reform, the UK's GDP was estimated to be 5.5% smaller than it would have been had the UK remained in the EU. This translates to a loss of approximately Β£140 billion in annual economic output. The report attributes this to reduced trade, lower business investment, and weaker productivity growth since the 2016 vote.
Other studies, including from the London School of Economics and the National Institute of Economic and Social Research, have found similar effects, with GDP losses ranging from 5% to 6%. The Office for Budget Responsibility has also projected that Brexit will reduce UK productivity by 4% in the long term compared to remaining in the EU.
While some sectors, such as financial services, have adapted, the overall consensus among economists is that Brexit has imposed a persistent drag on the UK economy. The government has pursued new trade deals, including with Australia and New Zealand, but these have not offset the losses from reduced access to the EU market, the UK's largest trading partner.
