“Leave means leave!” It was the chant that resonated across the United Kingdom on that fateful day in June 2016. But seven years after the historic Brexit vote, is the UK finally starting to experience the buyer’s remorse that critics always feared?
New economic analysis is pointing towards a resounding “yes”. It seems that the rosy promises of prosperity the Vote Leave campaign made haven’t exactly materialized. Instead, businesses are sinking under mountains of red tape, the economy is lagging, and the pound has taken a beating.
I deep-dived into the latest analyses on Brexit’s economic fallout, and the results are truly sobering.
Brexit by the Numbers
Let’s break down some of the most startling figures thrown around by leading economists. The Centre for European Reform says that Brexit is leaving a gaping hole of almost £100 billion in annual UK exports. In fact, Britain’s export growth has stagnated compared to other advanced economies. Analysts claim we’re missing out on around £23 billion worth of growth in goods and services exports on a quarterly basis. Ouch!
And that’s not all. Economists at Cambridge Econometrics recently found that leaving the EU has already robbed the UK economy of £140 billion in lost growth. If that doesn’t make you stop and think, I don’t know what will.
But wait, there’s more! Bloomberg Economics believes that Brexit is draining the UK economy to the tune of £100 billion every year. They estimate that our gross domestic product (GDP) is roughly 4% smaller than it would’ve been without Brexit. The numbers really are bleak.
Jobs, Investment, and Trade Woes
So, what exactly is driving this economic downturn? Brexit has hit jobs and investment, leading to a domino effect of problems.
The Centre for European Reform found that we’ve lost out on approximately £33 billion in investment, trade, and tax revenue. To make matters worse, those 3 million fewer jobs predicted by Cambridge Econometrics aren’t great news for employment figures either.
And who can forget the endless delays and frustration surrounding international trade? New import controls and paperwork requirements have thrown a massive spanner into the works for businesses trying to export to the EU, leading to lost profits and headaches all around.
Rising Prices and a Weakened Pound
It’s not just businesses that are taking the hit – British consumers are also feeling the squeeze. According to a 2023 LSE (London School of Economics) study, Brexit red tape has added nearly £7 billion to food prices for households. It’s no wonder inflation remains stubbornly high, making those weekly grocery shops even more painful.
Let’s not forget that the pound sterling hasn’t exactly been thriving since we left the EU. Analysts are worried that a weakened pound may make imports more expensive, driving up inflation even further. This is hardly the boost to the economy that Brexiteers were hoping for.
A Unilateral Divorce and Its Consequences
It’s important to remember that the UK’s decision to leave the EU was a unilateral move, effectively a divorce of sorts. The EU, while undoubtedly affected by the separation, wasn’t the one actively choosing this path. In essence, the UK is now grappling with the consequences of its own decision.
While the EU should avoid taking a vindictive stance, and certainly acknowledge the UK as a key European partner, there’s a lesson to be learned for other EU members. Brexit offers a cautionary tale about the immense economic costs and complexities of leaving the bloc.
What Does the Future Hold?
I get it – these are difficult numbers to stomach. It’s a far cry from the £350 million a week for the NHS touted by the Leave campaign, isn’t it?
While it’s tempting to get caught up in the doom and gloom, all hope may not be lost. Some free-market analysts argue that Brexit could still create economic opportunities for the UK. But whether the government capitalizes on this potential and whether any benefits ultimately outweigh the significant costs – well, the jury is still out.
This economic turmoil raises many questions and makes the decision to leave the EU an ever more polarizing debate. Will we begin to see some of the Brexit gains predicted? Will the UK strike lucrative trade deals and deregulate enough to truly thrive? Or will the UK’s economic woes grow, making “Bregret” the word on everyone’s lips? Only time will tell.
FAQ
Estimates vary, but leading sources suggest losses ranging from £100 billion annually to a £140 billion hit to GDP since the referendum.Estimates vary, but leading sources suggest losses ranging from £100 billion annually to a £140 billion hit to GDP since the referendum.
New customs checks, paperwork, and regulatory hurdles increase costs and create delays for businesses selling to the EU.
Yes. New trade barriers have increased the cost of food imports, contributing to higher inflation for consumers.
Brexit is one factor impacting the pound’s exchange rate. Concerns about economic stability contribute to currency volatility.
Likely. Brexit demonstrates the significant complexities and potential economic losses involved in leaving a major trade bloc.
