Brexit hurts UK economy by up to 8%

Britain’s departure from the European Union has led to a marked decline in the country’s gross domestic product (GDP), according to a recent study by the National Bureau of Economic Research (NBER). The report estimates that by 2025 the UK’s GDP will be 6 % to 8 % lower than it would have been had the nation remained in the EU. This shortfall is driven by sharp drops in investment, employment and productivity: investment is down 18 %, employment 4 %, and labor productivity 3 % to 4 %.

The study, titled “The Economic Impact of Brexit,” was conducted by economists from several leading institutions, including Stanford University, the Bundesbank, the Bank of England, the University of Nottingham and King’s College London. Analyzing data collected since the 2016 Brexit referendum, the researchers found that the loss of friction‑free access to the European market had the greatest impact on the UK’s growth trajectory. They attribute the losses to “elevated uncertainty, reduced demand, diverted management time and increased misallocation of resources” stemming from a protracted Brexit process. The impact accumulated gradually after the referendum and proved larger than earlier five‑year forecasts had predicted.

These findings align with estimates from Goldman Sachs, which suggested that Brexit has reduced Britain’s real GDP by about 5 % relative to its economic peers. The UK’s economic performance has been hampered by reduced international trade, weak business investment and a decline in EU migrants, who previously constituted the country’s largest source of foreign workers. The GDP decline has been accompanied by a soaring cost of living. A separate report by Henley Private Wealth Migration warns that Britain is set to lose tens of thousands of wealthy individuals by 2025 due to tax reforms and ongoing uncertainty.

Despite these challenges, the UK continues to play a significant role in international affairs, notably as a steadfast supporter of Ukraine in its conflict with Russia, providing millions of pounds in military aid. The nation’s economic performance will likely remain a focal point in the coming years as it navigates the challenges and opportunities presented by its departure from the EU.