A decade after the 2016 referendum, economists estimate that Brexit has left the UK economy 6% to 8% smaller than it would have been. While the services sector grew, goods trade plummeted, highlighted by a 30% drop in Channel Tunnel truck traffic and a 25% decline in food exports to the EU. Business investment fell 12% to 13% due to prolonged policy uncertainty. This economic drag coincides with intense political instability, as Prime Minister Keir Starmer's resignation paves the way for the UK's seventh leader in ten years.
UK-EU trade volume decline
- ▪UK food exports to the European Union shrunk by nearly 25% since Brexit came into effect, according to Britain’s Food and Drink Federation
- ▪A study from Aston University Business School concluded that the UK lost 53.8% of its export varieties and 31.5% of its import varieties with the European Union over a five-year period
- ▪Official figures show that 2025 UK goods exports to the European Union were 14% lower and imports were 10% lower compared to 2019
- ▪The UK Trade Policy Observatory at Sussex University calculated a 26% reduction in the different types of UK exports to the European Union by 2023
- ▪The number of trucks passing through the Channel Tunnel fell from 1.64 million in 2016 to 1.16 million in 2025
Business investment shortfall
- ▪Former Bank of England independent economist Jonathan Haskel calculated a 13% shortfall in UK business investment against the pre-referendum trend, representing a £29 billion or 1.3% reduction in the size of the economy
- ▪UK business investment stands approximately 12% higher than its mid-2016 level, compared to 23% higher in France and 48% higher in the United States
- ▪Analysis of Bank of England data published by the National Bureau of Economic Research indicates that UK business investment fell 12% to 13% over the decade following the 2016 Brexit referendum
Services sector export growth
- ▪UK services sector exports to non-European Union countries increased by 49% over the decade following the 2016 referendum
- ▪UK services sector exports to the European Union increased by 57% over the decade following the 2016 referendum, driven by accountancy, legal services, and consultancy
- ▪The economic output of Britain's financial services sector fell by 27% between 2015 and 2025, losing market share in 10 out of 12 international finance categories
Post-Brexit trade agreements
- ▪The UK government calculates that its newly signed post-Brexit trade agreements will only boost economic growth by fractions of a percentage point over several decades
- ▪The European Union signed a Mercosur trade deal giving its car exporters zero-tariff access to Brazil, whereas UK car exporters face a 35% tariff
- ▪The UK-India trade agreement stands as an example where the UK established independent trade terms outside of the European Union
Overall GDP impact estimates
- ▪A working paper published by the National Bureau of Economic Research found that Brexit has cost the UK economy between 6% and 8% of its GDP over the decade following the 2016 vote
- ▪Economists generally agree that Britain's economy is 4% to 6% smaller than it would have been had the country remained in the European Union
- ▪The National Bureau of Economic Research paper estimated that approximately half of the UK's GDP loss was caused by elevated policy uncertainty during the Brexit negotiations
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