Brexit’s Economic Impact: UK GDP 6% to 8% Lower a Decade After Vote, Study Finds

Ten years on from the 2016 referendum, new economic analysis indicates that Brexit has reduced the United Kingdom's Gross Domestic Product (GDP) by 6% to 8% compared to a scenario where the country had remained in the European Union. This finding comes from a comprehensive study using a decade of data, co-authored by economists including Stanford University's Nick Bloom and researchers affiliated with the Bank of England.

The research, published as a working paper by the U.S. National Bureau of Economic Research (NBER), concludes that the economic cost was not a sudden shock but a gradual accumulation over the past decade. The impact was attributed to several factors, including prolonged uncertainty following the vote, which dampened business activity, and the introduction of new trade barriers with the EU.

Investment and Trade Bear the Brunt

According to the NBER paper, the effects were most pronounced in business investment, which is estimated to be between 12% and 18% lower than it would have been otherwise. The analysis also points to a reduction in employment of 3% to 4% and a drop in labour productivity of 3% to 4% by 2025.

These findings are consistent with analysis from the UK's Office for Budget Responsibility (OBR). The OBR maintains its long-run forecast that Brexit will reduce the UK's productivity by 4% and that both exports and imports will ultimately be around 15% lower than if the UK had stayed in the EU. The new trade rules have created more friction for goods than for services, leading to underperformance in goods exports compared to other G7 nations.

A Wider Consensus

While early forecasts of an immediate recession did not come to pass, experts note that the long-term predictions of a smaller economy are proving to be accurate. In a June 2026 interview, Bank of England Governor Andrew Bailey stated that the "level of activity and growth in the economy has been lower" as a result of reducing the size of the markets the UK trades with, which negatively impacts growth and productivity.

The economic drag has been attributed roughly equally between the uncertainty that followed the 2016 vote and the trade barriers and costs that were implemented after the UK formally left the single market. While separating the specific effects of Brexit from other major global events like the COVID-19 pandemic and the energy crisis remains a challenge for economists, the use of 'doppelgänger' models—which compare the UK's performance to a composite of similar economies—has helped to isolate the impact.

A decade later, the economic debate continues, but a growing body of evidence suggests the decision to leave the European Union has resulted in a persistent drag on the UK's economic growth.

Sources

• The Economic Impact of Brexit
• Brexit cost revealed as UK economy took 6% hit, Bank of England data shows
• How Brexit has made Britain poorer – in charts
• The Economic Costs of Brexit on the UK
• Brexit analysis
• Transcript of the Governor's pooled broadcast interview given on 18 June 2026
• Brexit ten years on: the economy
• Britain's economic woes fuel discontent with Brexit a decade after historic vote to leave EU

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