Brexit: 10 years later

Good morning from New Economy Brief.

Ten years, six (soon to be seven) prime ministers, one global pandemic, war in Europe, and a new monarch. A lot has changed since the UK voted to leave the EU, and yet the ongoing arguments over the UK-EU relationship show no sign of fading.

A fractious US relationship under a second Trump term is forcing a reckoning with our European neighbours, while a change in the Labour leadership threatens to drag the question back into the spotlight. A decade on from the seismic result, this week we ask: did we take back control? Or was Project Fear right all along?

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Britain's Economy: Unleashed

It's been a tough decade. Unpicking Brexit's economic impact is not straightforward. Political upheaval, the continuing effects of austerity, a pandemic, Liz Truss's "fiscal event," and an ongoing conflict-driven energy crisis all make it hard to pin changes in the national economy on any single factor. And through it all, the UK has just about kept growing, around 13% since 2016.

Fortunately, economists love a challenge. It's clear that George Osbourne's prediction of an immediate recession was off the mark. However, long-term forecasts did seem correct that, long-term, the economy would suffer. The OBR has estimated that lost growth caused by Brexit – about 4% – works out at roughly £100bn a year, or nearly £1tr over the last decade. New research, comparing the UK economy to 33 comparable countries, thinks this could even have been optimistic. They put the hit to UK GDP at a much more significant 6–8% below where it might have been by early 2025.

Goods, not so good. Goods trade is where the damage is clearest. UK goods exports to the EU stood at £184bn in 2025, down 14% from their 2019 level of £215bn. Exclusion from the single market has also locked British firms out of European supply chains. New trade deals with Australia, New Zealand, and India have done little to fill the gap: their combined benefit is roughly a tenth of what's been lost from reduced EU trade, even according to the government’s most optimistic impact assessments. Further, NIESR estimates business investment is 12.4% lower in 2023 than under a Remain scenario. 

It's not all doom and gloom. UK services have performed better. In 2025, exports of services to the EU were 28% above their pre-Brexit peak in 2019, while exports to non-EU countries were 26% higher. A Remainer-predicted exodus from the City of London never happened. But regulated sectors like financial and legal services still face meaningful barriers under the UK-EU Trade and Cooperation Agreement, so activity may still be below a Remain scenario.

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Living standards

Every little doesn't help. Similarly, it can be hard to unpick Brexit's impact at a micro level, alongside soaring energy prices and stagnant incomes. However, research finds that UK prices rose 7% more than comparable economies between 2016 and 2024, driven by sterling's devaluation and reduced trade. The first of these alone has cost households around £870 a year. Meanwhile, Professor Jonathan Portes argues losing access to a flexible EU labour supply has pushed up prices, rather than wages, in hospitality, agriculture, logistics, and food processing. Real wages are expected to be 1.8% lower by the end of the decade than under a Remain scenario, equivalent to around £470 per worker annually. All taken together, and combined with the other economic headwinds Britain is facing, it's expected that by the end of the decade, average living standards in Britain and Poland will have converged. 

Levelling Down. Meanwhile, a smaller economy also means lower tax revenues, which limits the fiscal room for investing in public services or reducing taxes. Far from matching regional and local funding from the EU, successive UK schemes have offered substantially less. EU investment worth roughly £1.7bn a year in today's money has been replaced by just £687m a year. 

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...and the rest

Migration. Rather than the drop in migration promised by many of its advocates, Brexit has precipitated a sharp rise. EU arrivals collapsed from over half a million in 2016 to just 76,000 in 2025 as political uncertainty rose and UK jobs became less attractive. However, overall net migration hit an all-time high of 944,000 in the year ending March 2023, with increases driven by the Skilled Worker visa and international student recruitment, mostly from non-EU countries. While the net migration figure has since fallen sharply, to less than 200,000 in 2025, it certainly has not been put to bed as a political issue.  

The Environment. Stringent EU regulation provided strong environmental protections. Unfortunately, the Office for Environmental Protection, intended to replace EU oversight, found that many regulations carried across from European Law aren't being implemented or enforced. As just one example, water cleanliness has deteriorated markedly, with British swimming waters now five times more likely to be polluted than in the EU. 

Regulation. The promised competitive dividend from regulatory freedom hasn't arrived, and the boon that some economists are promising from regulatory divergence (read: deregulation) on technologies like AI could come with significant social and economic costs of its own. HMRC estimates the number of customs forms businesses must complete has quadrupled, costing an extra £7.5bn a year – a burden that falls especially hard on smaller firms. And the sovereignty gains have been limited: nearly 7,000 EU-derived laws remain on the UK statute book.

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What now?

What the public thinks. Over half of Brits (51%) consider Brexit 'more of a failure', while only 13% would call it a success. In a recent YouGov poll from, 60% would now vote Remain, while 56% actively support rejoining, and 51% want another referendum within five years. However, it's worth noting 74% of Reform voters think it could have been a success, if politicians hadn’t messed it up. 

Labour's plan? Despite lots of warm words, so far the Starmer government has chosen a cautious 'reset' with the EU over anything more full-throated. Their reforms have focussed mainly on food and energy, adding an estimated 0.3%–0.7% to GDP. A further 'reset' summit on 22nd July (now delayed in light of Starmer’s resignation) could implement a new youth mobility scheme, along with further alignment on veterinary regulation. However, the Resolution Foundation is clear that bigger gains would require political engagement with the single market, customs union and freedom of movement. Frontier Economics estimates that rejoining the customs union alone could add over 2% to GDP in the long run. 

Burnham & Brexit. Despite Wes Streeting’s early attempts to bring Brexit back into public debate by declaring his intention to rejoin the EU, Makerfield's new MP has kept his own counsel on the issue. Historically a strong voice for Remain, he’s maintained that he would like to see the UK rejoin the EU in his lifetime, but is currently not keen to "re-run" Brexit arguments. However, as economic pressures keep building and the race to re-arm Europe continues apace, Burnham may not have the luxury of sitting on the fence indefinitely should he become Prime Minister. Already, campaign groups are lobbying, with research suggesting the UK could recover up to 90% of Brexit’s economic hit to UK GDP by rejoining. 

A decade years well spent? Ten years on, the Brexit ledger may not be as catastrophic as its fiercest opponents predicted, but nonetheless looks pretty unremittingly negative – and falls far short of the ‘sunlit uplands’ promised by its champions. The economic costs are real and accumulating. But as the Institute for Government points out, many of the failures that have been left to fester didn't start with Brexit: social care, a housing shortage, a crumbling healthcare system. Brexit cannot carry the can for all of our political and economic ills, though it may have exacerbated them. This decade has undoubtedly been tough. In the next, we’ll find out if the UK can find a lasting settlement to the European question that works both economically and politically.