DistantNews
Support us
Brexit hit UK GDP by 6%, analysis finds
🇬🇷 Greece /Economy & Trade

Brexit hit UK GDP by 6%, analysis finds

From Kathimerini · () Greek

Translated from Greek, summarized and contextualized by DistantNews.

At a glance

Analysis Documents & data Context piece
  • Brexit has caused a 6% hit to the UK's GDP, according to an analysis using Bank of England data.
  • Half of the economic blow came from uncertainty after the referendum, with the rest from increased trade barriers after leaving the EU's single market.
  • The Bank of England governor stated that trade levels and economic growth are lower due to Brexit, though the impact on financial services was less severe than predicted.

Brexit has inflicted a 6% blow to the United Kingdom's GDP, an analysis of Bank of England data reveals. Economists examined internal data on decisions, opinions, and financial outcomes from thousands of British companies since the 2016 referendum.

In the case of Brexit, there has been a serious economic impact on the UK, but it has emerged gradually over the next decade.

— Nick BloomProfessor Nick Bloom of Stanford University, a co-author of the research, commented on the gradual economic impact of Brexit.

The study, which used data the Bank of England employs for interest rate decisions, estimated the UK's growth trajectory had it voted to remain in the EU. Researchers found that approximately half of the economic damage stemmed from the surprise and uncertainty following the referendum. The remaining impact is attributed to increased trade barriers after the UK departed the customs union and single market in 2021.

I think the level of activity and growth in the economy has been lower.

— Andrew BaileyThe Governor of the Bank of England, Andrew Bailey, spoke about the economic consequences of Brexit.

Professor Nick Bloom of Stanford University, a co-author of the research, stated that the UK experienced high growth rates in the years preceding Brexit and could have at least partially kept pace with the U.S. without this disruption. He noted that the Bank of England's business data provided significant confirmation for this assessment.

And the reason for that is that if we reduce the size of the markets that we trade with, therefore reducing our export markets, then that tends to have a negative impact on growth.

— Andrew BaileyAndrew Bailey explained how reduced trade markets affect economic growth following Brexit.

"In the case of Brexit, there has been a serious economic impact on the UK, but it has emerged gradually over the next decade," the study states. This research emerges as senior Bank of England officials have become more candid about Brexit's economic consequences. Governor Andrew Bailey recently told journalists that as a result of Brexit, "I think the level of activity and growth in the economy has been lower." He explained that reducing the size of trading markets, and thus export markets, tends to negatively impact growth. However, he added that while the impact on financial services "was not good," it "was not by any means as damaging as many people predicted at the time."

And while the impact on financial services was not good, it was not by any means as damaging as many people predicted at the time.

— Andrew BaileyThe Bank of England Governor commented on the impact of Brexit on financial services.
DistantNews Editorial

Originally published by Kathimerini in Greek. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

More Stories

From Our Blog