{"id":592953,"date":"2025-11-25T14:11:13","date_gmt":"2025-11-25T14:11:13","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/592953\/"},"modified":"2025-11-25T14:11:13","modified_gmt":"2025-11-25T14:11:13","slug":"brexit-reduced-uk-gdp-by-up-to-8-study","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/592953\/","title":{"rendered":"Brexit \u2018reduced UK GDP by up to 8%\u2019: Study"},"content":{"rendered":"

LONDON<\/strong><\/p>\n

Brexit has hit the UK economy harder than many critics feared, according to a new study by the National Bureau of Economic Research (NBER) in the US.<\/p>\n

The report, written by five economists, including one from the Bank of England, examines \u201calmost a decade\u2019s worth of data\u201d to assess the long-term impact of the UK\u2019s decision to leave the European Union.<\/p>\n

The authors say the Brexit process \u2014 which began when the Leave campaign won the June 2016 referendum \u201cby 51.9% to 48.1%\u201d \u2014 dragged on for years due to its complexity.<\/p>\n

Although the UK formally left the EU in January 2020, a transition period ran until the end of that year, with \u201cnegotiations on Northern Ireland stretching into 2023.\u201d<\/p>\n

They write that \u201cit was not until 2024 that the Brexit process was close to completion,\u201d forcing them to analyze nearly 10 years of economic data.<\/p>\n

Their findings suggest a significant hit to Britain\u2019s economic performance.<\/p>\n

The study estimates that \u201cby 2025, the Brexit process had reduced UK GDP by 6% to 8%, investment by 12% to 18%, employment by 3% to 4%, and productivity by 3% to 4%.\u201d<\/p>\n

These effects, the economists note, \u201caccumulated gradually over time.\u201d<\/p>\n

The report identifies four main channels through which Brexit has weakened the economy. The decision to leave the EU created \u201ca persistent increase in uncertainty, weighing on investment, in particular.\u201d<\/p>\n

Firms also faced \u201clower expected demand for goods and services,\u201d while innovation and IT investment slowed and management resources were redirected towards preparing for Brexit.<\/p>\n

Meanwhile, \u201cthe more productive, internationally exposed firms were more negatively impacted,\u201d reducing productivity gains between companies.<\/p>\n

To assess the impact, the economists highlight that the referendum outcome was widely seen as unexpected \u2014 betting markets put the odds of Leave winning at \u201caround 30% in the months before the vote.\u201d<\/p>\n

They use this \u201cdiscrete event\u201d to employ both macro-level and micro-level identification strategies.<\/p>\n

At the macro level, the UK\u2019s post-2016 performance is compared with up to 33 similar countries.<\/p>\n

The approach, they say, \u201cmatches UK performance to these countries in a 10-year pre-referendum control period and then simulates the next 10 years after the referendum to forecast\u201d how Britain would have performed without Brexit.<\/p>\n

The study concludes that the economic consequences of leaving the EU have been deeper and more persistent than many anticipated at the time of the vote.<\/p>\n


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