Start with the exporters who quit. Analysis from the LSE suggests the Trade and Cooperation Agreement caused around 16,400 firms to stop selling to the EU altogether, some 14 per cent of all firms that exported there. Together those firms saw exports fall by 30 per cent. Ten years after the referendum of 23 June 2016, that is the mechanics of Brexit’s damage: no cliff edge, just a steady thinning out of who trades.
Zero tariffs, plenty of friction
The deal carried no tariffs and no quotas, which sounds generous. The catch is that Britain sits outside both the single market and the customs union, so goods still meet customs checks and a regulatory border. Jonathan Portes of King’s College London lists the rest: rules of origin requirements, paperwork, the loss of automatic mutual recognition. Services firms in regulated sectors lost market access rights. Free movement ended.
Who pays? Mostly the small. A big exporter can hire a few extra people to handle the forms. A small one often finds the sums no longer work. Portes notes that overall trade flows can look resilient while the number of firms selling to the EU shrinks.
Estimates commonly put goods exports 10 to 15 per cent below where they would otherwise have been. The Office for Budget Responsibility assumes exports and imports will both end up around 15 per cent lower in the long run. The World Trade Organization found that goods exports in 2024 sat 17 per cent below their 2018 level in real terms.
How big is the hit?
Here the argument gets technical, because nobody can observe the Britain that stayed. Researchers build “doppelganger” economies from other countries to stand in for it. A handful of such studies put the UK economy two to eight per cent smaller than it would have been. A 2025 study led by Nick Bloom estimated that by the start of 2025 the economy was approximately eight per cent smaller on macro data and six per cent smaller on firm-level data, with investment 12 to 18 per cent lower and productivity three to four per cent lower. Paul Johnson, former director of the Institute for Fiscal Studies, and Robert Johnson of the Centre for Cities judge it unlikely that the long-term hit to national income is under four per cent.
The counterfactual cuts both ways. Growth was already feeble before the vote, and Covid and the energy price spike after Russia invaded Ukraine landed on top. Real GDP per head at the end of 2025 was almost exactly where it stood at the start of 2020, up by less than one per cent. None of that, the Johnsons stress, tells you what Brexit itself did.
What it did not do is cause an instant recession, as Portes points out. The drag is cumulative: fewer firms trading, weaker investment, less integration into European supply chains.
The promised upside
Before the vote, an economists’ poll found 88 per cent expecting national income to suffer over the following five years. Just four per cent expected a gain. The other half of the pitch was deregulation, a “Singapore on Thames”. So far the divergence has been minimal. Banning live animal exports, setting up freeports and repealing the cap on bankers’ bonuses are the examples the Johnsons cite, and they call them small indeed.
Even a former believer has stopped defending the ledger. Ryan Bourne, now at the Cato Institute, belonged to Economists for Brexit. “We argued, in good faith, that disentangling ourselves from the EU would unlock long-term economic potential via more policy freedom,” he wrote in November 2025. “Nine years on, we cannot pretend things have gone well so far.”
Sources
- Singapore on Thames or the Sick Man of Europe?: The Economics of Brexit Ten Years from the Referendum
- Brexit ten years on: the economy
