Ten years on, Brexit's economic impact is becoming clearer

Ten years on, Brexit's economic impact is becoming clearer ByFaisal IslamEconomics editorNot long after the UK left the EU in 2020, a Bristol-based firm called Eskimo started selling a new kind of high-fashion and energy-efficient electric radiator, based on new technology developed by academics in the city. They planned to send them around Europe using the Channel Tunnel. It was a timely product given Europe's green ambitions, and with orders flowing, its Birmingham factory was being kept busy. The boss Phil Ward tells me his start-up has continued to grow, but that in his view it could have been so much more without what he calls "the Long Brexit effect": in 2020, 40% of his exports went to the European Union, and by 2025 it was just 5%. The post-Brexit deal agreed with the EU by then-Prime Minister Boris Johnson in December 2020 guaranteed zero tariffs on exports to the EU, but Ward says that despite this, red tape and paperwork not directly related to tariffs were enough to create delays, costs and the expectation of hassle for prospective customers. Eskimo did manage to export some goods to agents in France but it stopped selling directly to European consumers entirely. A planned expansion to Germany floundered. And as Eskimo discovered when it attempted to export towel rails to Australia and New Zealand, both countries abide by international safety standards that are heavily influenced by the EU's CE mark. This matters because one theoretical potential Brexit benefit was that it would allow UK regulators to not follow the EU's safety regulations and take a more pro-innovation, less regulatory approach for high-tech inventions. Eskimo's experience is one example of a broader trend reflected in export figures. The UK Trade Policy Observatory at Sussex University calculated a rapid 26% reduction in the different types of UK exports by 2023, while a new study from Aston University Business School using five years of more detailed trade data concludes a loss of 53.8% of the type of exports and 31.5% for imports. These figures for "trade varieties" are falls in the number of products sent to different EU countries. A decade ago, many economists argued the UK would sustain longer-term economic damage by leaving the EU and many believe that damage has come to pass. But to make that call you have to compare what did happen with what might otherwise have happened were it not for Brexit and doing that is a matter of method and statistical judgement. And that judgement has to account for the fact that the period since Brexit has been a time of huge global flux. The pandemic that struck in the spring of 2020, the war in Ukraine that began two years later and, more recently, the energy price shock sparked by the conflict in Iran all have to be accounted for. So too does the question of whether a Brexit-free UK would have really kept up with the Silicon Valley tech boom in recent years to the extent Brexit Britain has. The clear consensus of economists making the calculations say they have factored in the global turmoil when assessing Brexit's impact. Others question their methods and the extent of Brexit's impact. Some of the most negative predictions back in 2016, including those that said the UK could experience a Great Depression‑style hit, proved unduly pessimistic. Whatever economic hit there was, it was not sudden enough to cause an instant recession. But those who believe the UK did sustain longer-term economic damage by leaving the EU say the hit was no less profound. Image source, AFP via Getty ImagesImage caption, Many economists argued the UK would sustain longer-term economic damage by leaving the EU "Among economists there is not much debate, but there still is among policy folks. The experts were right. It was, if anything, worse than we thought, but it's taken longer to get there," says Nick Bloom, a British Stanford University professor and author of one of the most prominent recent major studies using Bank of England data. His work sits among dozens of academic economics papers that have analysed vast amounts of data to try to assess what effect Brexit had on the UK's economy. UK trade with Europe had been on an upward trend before 2016. But official figures show that compared to 2019, 2025 UK exports to the EU were 14% down and imports were down 10%. And they've been getting worse. Last year, 2025, was the worst year for UK goods export volumes to the EU this century, apart from one year in the depths of the financial crisis. Think tank Niesr calculates exports were 16.9% lower and imports 16.1% less than what could have been expected based on positive pre-2016 trends. The Centre for European Reform uses a different method, trying to take account of what could have happened if the UK had not been excluded from a more recent surge in intra-EU trade, leading to a goods trade hit of 16% to exports and 14% to imports. It's all in the same ballpark and there is other research fro

Ten years on, Brexit's economic impact is becoming clearer

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Ten years on, Brexit's economic impact is becoming clearer

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