Brexit Shaved 6% Off UK Economy, Bank Data Shows
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- A new study co-authored by Stanford professor Nick Bloom and Bank of England economists found Brexit reduced UK economic growth by approximately 6% over the past decade, based on the Bank's internal Decision Maker Panel data covering thousands of British companies.
- The research attributed roughly half of the economic hit to the surprise and uncertainty of the post-referendum period, with the remainder stemming from trade barriers after the UK left the EU customs union and single market in 2021.
- Five traditional analysis methods included in the same paper pointed to an average 8% economic hit — higher than the 6% figure derived from the company-level data.
- Critics argue the study does not fully account for US investment and tech-sector outperformance, or for the European energy crisis four years ago, making it hard to isolate Brexit's drag from other global shocks.
- Bank of England Governor Andrew Bailey recently told journalists that Brexit lowered the level of activity and growth by shrinking export markets, though he said financial services were "nowhere near as detrimental as many people predicted at the time."
- The Decision Maker Panel was originally set up by the Bank of England in 2016 specifically to give insight into the economic impact of Brexit, and is normally used to help inform interest rate decisions.
- Prime Minister Keir Starmer announced he will meet EU counterparts at a summit in July to negotiate deals on food and farm exports as well as electricity and emissions trading.
Why it matters: The Bank of England's own governor now publicly attributes lower UK growth to Brexit, lending official weight to the 6% finding as the government prepares to negotiate closer EU alignment on food, farming, and energy — deals that could partially reverse the post-2021 trade barriers the study blames for half the damage.
