Brexit Costs Britain Billions in Trade and Investment, Study Finds Ten Years On

Ten years following the referendum on European Union membership, the economic ramifications of Brexit are becoming demonstrably clear. Analyses from the Centre for Economic Performance (CEP) at the London School of Economics indicate a persistent drag on the UK economy, primarily attributable to the departure from the EU single market and customs union.

Official figures from the Office for National Statistics (ONS) show that UK-EU goods trade has fallen by approximately 15% compared to what it would have been had the UK remained within the EU. This decline is disproportionately affecting smaller businesses grappling with increased customs checks, regulatory divergence, and logistical hurdles. Export volumes, particularly for food and agricultural products, have experienced notable contractions, with importers in the EU shifting supply chains away from the UK.

Furthermore, foreign direct investment (FDI) into the UK has seen a significant downturn. The Bank of England previously estimated a £29 billion reduction in UK FDI by the end of 2021, directly linked to Brexit uncertainty and the perceived diminished attractiveness of the UK as a gateway to the European market. This reduction in investment flows has broader implications for job creation and long-term productivity growth.

While proponents of Brexit argued for new global trade deals to offset EU losses, the practical outcomes have been limited. The anticipated benefits of trade agreements with non-EU countries have not materialised sufficiently to compensate for the economic disruption of exiting the bloc, leading to a net negative impact on the UK’s overall trade intensity and economic output. The OBR maintains that Brexit will reduce the UK's long-run productivity by 4% compared to remaining in the EU.