Brexit<\/a> alone can really be blamed for Britain\u2019s economic slowdown.<\/p>\nWhat has the Chancellor said?<\/p>\n
Speaking at the International Monetary Fund, Reeves said \u201cthe UK\u2019s productivity challenge has been compounded by the way in which the UK left the European Union.\u201d<\/p>\n
She pointed to the Office for Budget Responsibility\u2019s (OBR) estimate that the economy is around 4 per cent smaller than if Britain had stayed in the EU. <\/p>\n
In an interview with Sky News, she called the impact \u201csevere and long-lasting\u201d, adding that Brexit, austerity and the fallout from Liz Truss\u2019s mini-budget were all shaping her decisions ahead of next month\u2019s Budget.<\/p>\n
Reeves said ministers were trying to \u201cundo some of that damage\u201d by rebuilding links with the EU on food, farming, youth mobility and energy trading, while seeking \u201cstronger trade ties, most importantly with the EU\u201d.<\/p>\n
![\"LIVERPOOL,](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/10\/SEI_268330356.jpg\")
Health Secretary Wes Streeting (Photo: Dan Kitwood\/Getty Images)<\/p>\n
Who agrees with her?<\/p>\n
Health Secretary Wes Streeting said he was \u201cglad that Brexit is a problem whose name we now dare speak\u201d.<\/p>\n
Speaking at the Cliveden Literary Festival, he said Britain had suffered \u201cover a decade of low productivity, low growth, and therefore you end up with a high burden of taxation.\u201d<\/p>\n
Streeting said: \u201cWe were warned [Brexit] was going to have an economic impact, and it has. And it\u2019s hit our country hard.\u201d He called for a \u201cmore rational conversation\u201d with the EU to \u201cbegin to build back what we have lost.\u201d<\/p>\n
Andrew Bailey, the governor of the Bank of England, has also said the UK\u2019s growth potential has fallen. <\/p>\n
He told an audience in Washington that it had dropped from 2.5 per cent to 1.5 per cent over the past 15 years, citing \u201clower productivity growth, an ageing population, trade restrictions \u2013 and post-Brexit economic policies.\u201d<\/p>\n
Bailey described the short-term effect of Brexit as \u201cnegative for the foreseeable future\u201d, but said there could be \u201csome at least partial rebalancing\u201d over time.<\/p>\n
What does the evidence show?<\/p>\n
The OBR has repeatedly said that Brexit will make the UK economy about 4 per cent smaller in the long run than if it had remained in the EU. Its 2025 forecast said roughly a third of that loss had already happened, mainly because of weaker trade and lower business investment since 2016.<\/p>\n
A 2025 study by John Springford for the Constitution Society and the Federal Trust found a similar result. By mid-2022, he estimated, the economy was 5 per cent smaller than it would have been without Brexit. <\/p>\n
Business investment was 10 per cent below trend, cutting GDP by about 1.3 per cent. He said this had cost the Treasury around \u00a340bn a year in lost tax revenue, writing that \u201cthe consensus view \u2013 that Brexit\u2019s economic impact would be negative and large \u2013 has been borne out.\u201d<\/p>\n
Springford also found that goods exports and imports were 15 and 13 per cent lower than those of comparable economies. The car industry has been one of the hardest hit, while financial and transport services have grown more slowly than elsewhere.<\/p>\n
New trade deals with Australia, New Zealand, India and the trans-Pacific partnership are forecast to lift GDP by only 0.2 per cent in total \u2013 far smaller than the losses from reduced EU trade.<\/p>\n
A separate analysis by Cambridge Econometrics, commissioned by City Hall, estimated that Brexit had cost the UK \u00a3140bn in lost output and nearly two million jobs by 2023. <\/p>\n
It said London alone had lost \u00a330bn and 290,000 jobs, mainly in finance and construction. Mayor Sadiq Khan said the findings showed that \u201cthe hard-line version of Brexit we\u2019ve ended up with is dragging our economy down and pushing up the cost of living.\u201d<\/p>\n
Are there other reasons for the UK\u2019s slow down?<\/p>\n
The OBR has suggested that Brexit is only one part of the picture. <\/p>\n
It has identified other long-term pressures \u2013 including the 2008 financial crisis, weak investment, and the global energy shock after Russia\u2019s invasion of Ukraine.<\/p>\n
In a 2023 report, the OBR wrote that \u201cweak productivity growth since the financial crisis reflects low investment in capital, skills and innovation.\u201d Its chair Richard Hughes told MPs last year that \u201cbusiness investment in the UK has been weak since the referendum, and public investment has not compensated for that shortfall\u201d.<\/p>\n
Another OBR economist, Professor David Miles, said it takes time for new spending to boost growth. \u201cThere is a time lag between starting projects, spending some money on them and them actually coming on stream,\u201d he said.<\/p>\n
Hughes also pointed to record numbers of people out of work due to poor health. \u201cPeople being out of work for health reasons is accounting for hundreds of thousands of people lost from the labour force since pre-pandemic,\u201d he told MPs. <\/p>\n
\u201cMental health is now the most common reason people cite for being out of the labour force.\u201d<\/p>\n
So, is Brexit to blame?<\/p>\n
Most major studies \u2013 including those by the OBR, the Constitution Society and Cambridge Econometrics \u2013 agree that Brexit has made the UK economy smaller and weaker than it would otherwise have been, mainly because of lower trade and investment. <\/p>\n
The estimated loss, between 4 and 5 per cent of GDP, is widely accepted by official and independent forecasts. But these studies also show that Brexit is not the only cause of Britain\u2019s economic problems. Weak productivity, years of underinvestment, global shocks and an ageing population have all added to the slowdown.<\/p>\n
Verdict: <\/strong>Evidence from official and independent sources supports the claim that Brexit has weakened the UK economy. <\/p>\nBut it is one of several factors holding back growth \u2013 not the only one.<\/p>\n","protected":false},"excerpt":{"rendered":"The Chancellor has claimed that Britain’s economic woes have been “compounded” by Brexit – but is that the…\n","protected":false},"author":2,"featured_media":515493,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5226],"tags":[802,54419,748,1700,2000,299,5187,1699,4884,619,16,15],"class_list":{"0":"post-515492","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-brexit","8":"tag-brexit","9":"tag-brexit-deal","10":"tag-britain","11":"tag-economy","12":"tag-eu","13":"tag-europe","14":"tag-european","15":"tag-european-union","16":"tag-great-britain","17":"tag-rachel-reeves","18":"tag-uk","19":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115408940175853370","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/515492","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=515492"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/515492\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/515493"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=515492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=515492"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=515492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}