Brexit Cut UK GDP 6%-8% by 2025 as Investment Fell 12%-18%
Updated
Updated · Reuters · Jun 17
Brexit Cut UK GDP 6%-8% by 2025 as Investment Fell 12%-18%
3 articles · Updated · Reuters · Jun 17
Summary
NBER estimates Brexit left UK GDP 6%-8% lower by 2025 than if Britain had stayed in the EU, with productivity and employment down 3%-4%.
Investment fell 12%-18% in the study, which linked the drag to prolonged business uncertainty, weaker expected demand and slower productivity growth as firms managed post-Brexit disruption.
The UK Office for Budget Responsibility separately estimates the post-Brexit trade regime will cut long-run productivity by 4% and leave EU exports and imports 15% lower than otherwise.
Other researchers broadly point the same way: NIESR projected a 2%-3% hit to GDP per capita by 2023, while the Centre for European Reform earlier estimated a 5.5% GDP loss and about £40 billion in lost tax revenue.
Julian Jessop of the Institute of Economic Affairs disputes the NBER approach, arguing its counterfactual leans too heavily on unusually strong U.S. growth and overstates the lasting damage.
If the 'synthetic UK' model is flawed, how can we know the true economic cost of Brexit?
Studies project a long-term productivity slump for the UK. What undiscovered economic opportunities could possibly reverse this trend?
The UK's trade deficit hit £43.4 billion despite new deals. Is this the permanent economic reality of Brexit?
The UK’s Post-Brexit Economic Drag: 6–8% GDP Loss, Labour Shortages, and Shifting Public Opinion
Overview
The United Kingdom has faced nearly a decade of slow economic growth, described as a 'slow puncture,' with real wages barely rising, weak business investment, and disappointing productivity. This persistent underperformance is linked to several global shocks, but Brexit stands out as a major factor causing long-term economic costs. The UK’s GDP and trade have suffered, and the end of free movement has strained key sectors by creating labor shortages. These challenges confirm earlier forecasts about the negative impact of leaving the EU, highlighting how Brexit has reshaped the UK’s economic landscape.