Miguel Afonso Caetano"A large literature anticipated substantial long‑run costs of leaving the EU Single Market and Customs Union (HM Treasury 2016, IMF 2016, Van Reenen et al 2016). Early ex‑post work using macro data also pointed to a sizeable hit to UK GDP and trade (Born et al. 2019, Dhingra and Sampson 2022, Springford 2022, Haskel and Martin 2023, Freeman et al. 2025). VoxEU has been an important forum for this research and debate. Our contribution is to revisit the question now that almost a decade has passed since the referendum, bringing together macro and micro evidence in a single framework and comparing actual outcomes to the profession’s pre‑referendum forecasts.
In a new paper (Bloom et al. 2025), we combine micro data collected through the Decision Maker Panel (DMP), a survey of UK firms, with publicly available macro data to estimate the impact of Brexit. Our three main findings are:
- Brexit has had a large and persistent effect on the UK economy. By 2025, we estimate that UK GDP per capita was 6–8% lower than it would have been without Brexit. Investment was 12–18% lower, employment 3–4% lower, and productivity 3–4% lower.
- These losses emerged gradually. The impact was hard to see in 2017–18, but accumulated steadily over the subsequent decade as uncertainty persisted, trade barriers rose, and firms diverted resources away from productive activity.
- Economists were roughly right on the magnitude of the impact, but wrong on the timing. The consensus pre‑referendum forecast of a 4% long‑run GDP loss turned out to be close to the actual loss after five years, but too optimistic about the longer run."
https://cepr.org/voxeu/columns/brexits-slow-burn-hit-uk-economy
Brexit’s slow‑burn hit to the UK economy
The UK is once again debating why its economy has grown slowly since the mid‑2010s. This column examines the impact of the decision to leave the European Union in 2016. Using almost a decade of data since the referendum, the authors combine simulations based on macro data with estimates derived from micro data. These estimates suggest that by 2025, Brexit had reduced UK GDP by 6% to 8%, with the impact accumulating gradually over time. Investment, employment, and productivity were all affected, reflecting a combination of elevated uncertainty, reduced demand, diverted management time, and increased misallocation of resources.
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