Britain’s economy shrank about 6% after Brexit, study shows

A new academic study that analysed internal Bank of England data estimates that the United Kingdom’s economy is roughly 6% smaller than it would have been had it remained in the European Union. The researchers, led by Stanford professor Nick Bloom, compared the actual post‑2016 performance with a counter‑factual scenario and found that about half of the loss stems from the uncertainty and shock following the referendum, while the other half is linked to higher trade barriers after the UK left the customs union and single market in 2021.

The report notes that the Bank of England’s own surveys of thousands of firms were used to gauge expectations, investment decisions and productivity trends. BoE Governor Andrew Bailey has recently acknowledged that growth and financial‑sector activity are lower because of Brexit, though he said the impact on financial services was milder than earlier forecasts. Some economists caution that isolating Brexit’s effect is difficult because the period also includes the pandemic, energy crisis, inflationary pressures and global supply‑chain disruptions.