LONDON, June 17 (Parliament Politics Magazine) – Britain’s economy has seen weak growth overall since it left the European Union at the start of 2020, though disentangling the effects of Brexit from the COVID-19 pandemic which hit Europe weeks later has been hard for analysts. Following is a summary of estimates from official bodies and other major researchers regarding how the departure has impacted the national economy.
Research Findings on GDP and Investment
A report from the U.S. National Bureau of Economic Research published in November 2025 indicated that Brexit reduced UK GDP by 6% to 8% by 2025 compared to a scenario where Britain had remained in the European Union. The research, conducted by economists affiliated with Stanford University, the Bank of England, the Deutsche Bundesbank, King’s College London, and the University of Nottingham, also estimated that productivity and employment were reduced by 3% to 4%.
Investment saw a sharper decline, estimated between 12% and 18%. The researchers attributed this weakness to greater business uncertainty hitting investment, lower expected demand, and slower productivity growth due to the distraction of managing Brexit. They noted a greater impact on more productive firms that traded internationally.
The UK National Institute of Economic and Social Research, in an April 2025 report, projected a 2% to 3% loss in GDP per capita and labour productivity by 2023, rising to 5% to 6% by 2035. They also estimated a 12% to 13% decline in business investment by 2023, which is expected to reduce to 7% to 8% by 2035.
Official Perspectives and Criticisms
The UK Office for Budget Responsibility noted in its July 2025 assessment that the post-Brexit trading relationship is expected to reduce long-run productivity by 4% relative to remaining in the EU. The report stated that two-fifths of this impact had occurred before a post-Brexit trade deal came into force at the start of 2021. Furthermore, the office projected that Britain’s EU exports and imports will be 15% lower in the long run.
The Office for Budget Responsibility also concluded that new trade deals with non-EU countries will not have a material impact. Conversely, Julian Jessop of the Institute of Economic Affairs has criticized the methodology used in reports like that of the NBER. Jessop argued that the heavy weighting given to U.S. economic performance is flawed, as the U.S. has been an economic outlier since 2020.
“U.S. growth has been an outlier since 2020, UK GDP per capita growth similar to Germany and France,” Jessop stated.
He further noted that 8% higher GDP would require the UK to have significantly outperformed other major European economies, and he considers Brexit uncertainty to be a temporary hit to investment rather than a lasting one.
Market Shifts Impacting Fiscal Results
Previous analysis from John Springford at the Centre for European Reform, published in December 2022, estimated a 5.5% loss of GDP as of June 2022 compared with staying in the EU. This analysis also pointed to an 11% loss of investment and a 7% loss of goods trade, with services trade remaining largely unchanged. The study estimated around £40 billion of lost tax revenue due to the smaller economy.
The NIESR model further explains that increased trading costs lead to fewer high-productivity UK firms exporting. Simultaneously, reduced competition from the European Union leads to more low-productivity firms serving the domestic market. These structural shifts form the basis of the persistent productivity challenges identified by economists analyzing the post-referendum landscape.
