Britain’s gross domestic product saw a reduction of up to 8% after exiting the European Union, according to analysts.
The United Kingdom’s exit from the European Union diminished the nation’s gross domestic product by up to 8% by the year 2025, as stated in a working paper published by the National Bureau of Economic Research (NBER). Significant decreases in investment, employment, and productivity were cited as the primary causes of this downturn.
The study by NBER, titled ‘The Economic Impact of Brexit’ and released this month, was authored by economists affiliated with institutions such as Stanford University, the Bundesbank, the Bank of England, the University of Nottingham, and King’s College London. Their analysis involved examining data on the UK economy collected since 2016, the year of the Brexit referendum. The UK’s formal membership in the EU concluded on February 1, 2020.
The report indicated that by 2025, the UK’s GDP stood between 6% and 8% lower than projected if the nation had continued its membership in the EU.
The research revealed an 18% decline in UK investment, a 4% decrease in employment, and a 3 to 4% drop in labour productivity. The primary factor influencing the country’s growth trajectory was identified as the forfeiture of seamless access to the European market, a situation exacerbated by increased expenses for leading technologically advanced and globally oriented businesses.
The document attributed these losses to “heightened uncertainty, diminished demand, diverted managerial attention, and inefficient allocation of resources resulting from an extended Brexit process.”
According to the authors, the consequences accumulated progressively following the referendum and proved to be more substantial than initial five-year projections had indicated.
An independent Henley Private Wealth Migration Report, released earlier in the year, projected that Britain is poised to see tens of thousands of affluent individuals depart in 2025, a trend attributed to tax policy changes and prevailing uncertainty.
Previous estimates by Goldman Sachs economists suggested that Brexit diminished Britain’s real GDP by approximately 5% in comparison to its economic counterparts. The bank indicated that the UK experienced an underperforming economy and a rapidly increasing cost of living, stemming from decreased international trade, subdued business investment, and a reduction in EU migrants, who represented the nation’s primary pool of foreign labour.
These conclusions emerge while the UK continues to be among Ukraine’s staunchest supporters in its conflict with Russia, providing millions of pounds in long-range missiles, tanks, and various other armaments.