As the 10th anniversary of the Brexit vote approaches, the verdict on Britain’s economic performance is clear: voting to leave has resulted in severe costs for households and businesses.
Treasury forecasts ordered by George Osborne predicted an immediate recession – dubbed “Project Fear” by the Leave campaign – did not happen. The impact of the Covid pandemic, the wars in Ukraine and Iran and Donald Trump’s trade wars also cloud the picture.
But experts agree that the long-term forecasters were on the money: the economy is significantly smaller than it would have been otherwise, trade has suffered, business investment and productivity growth have stalled, and families are on average thousands of pounds worse off a year.
Charlie Bean, a former Bank of England deputy governor who reviewed the Treasury’s forecasts, said: “Osborne has a lot to answer for when he’s basically saying, ‘Look, the Treasury analysis shows, there’s going to be a deep recession tomorrow.’
“It was really misrepresenting what you could take. [it] And his overselling, obviously trying to win the argument politically. In hindsight, we had the vote and the world would not have immediately fallen off the cliff, and so the Brexiteers might say. [it] It wasn’t worth the paper it was written on.
“But the broad long-run estimate was in the right ballpark. We’re poorer than we would have been otherwise.”
Here are charts highlighting the economic results.
The pound is below its pre-EU referendum level.
The pound rose sharply after the polls closed on 23 June 2016. As Nigel Farage appeared ready to give up, the currency rose. But early holiday victories at key venues including Sunderland signaled a 10 per cent drop in the pound, its biggest one-day fall ever.
The fall in the pound raised the cost of importing goods, triggering an inflationary shock that hurt public finances and caused financial hardship to households across the country.
Exporters – who normally benefit from a weaker currency as their products become cheaper for overseas buyers – were unable to benefit as the uncertainty clouded trade appetite.
A decade on, the pound has never returned above pre-Brexit levels, leaving British holidaymakers in the pocket. The pound stood at $1.34 and €1.15, up from around $1.50 against the dollar and €1.31 against the euro shortly after polling closed.
UK growth has slowed.
There are reasons the Brexit recession never materialised: mostly because Treasury forecasts assumed an immediate no-deal departure rather than continued EU membership until 31 January 2020 – before an 11-month transition period and other deals since then.
According to the Office for Budget Responsibility, the Treasury watchdog, Britain is on track to lose 4% of national income over a 15-year period.
At the decade mark, an analysis by leading British economist Nick Bloom of Stanford University in the US and others in a research paper by the US National Bureau of Economic Research suggests that UK GDP per head is between 6% and 8% of what it would have been without Brexit.
Based on the performance of 33 other advanced economies, the analysis shows that the UK closely tracked these countries until 2016, before a large output gap opened up.
“The figures are really clear: Britain has grown more slowly since Brexit than before,” Bloom said. “Is it because of Brexit? Maybe. You can’t say for sure, but I don’t see anything else that’s going to open that gap with Britain and everybody else.”
Trade has been further affected by border friction.
Brexit involves erecting trade barriers, which has affected exports of goods. The EU is still the UK’s largest trading partner: in 2025, the bloc’s exports were £385bn (41% of all UK exports) and imports £474bn (49% of the total).
Since the end of the EU transition period on 31 December 2020, growth in UK goods exports has slowed compared to the G7. But services exports have performed more strongly. The OBR reckons this is because Boris Johnson agreed with Brussels that the UK-EU trade and cooperation deal created more friction for goods than services. Exporters, in particular, face more red tape and border delays.
Bloom compares the situation to a shop moving from the city center to the suburbs: “You make it hard to get there and back, and not surprisingly, there’s less demand. And you add uncertainty by opening and closing all the time, and people don’t know if you’re there.”
Uncertainty inhibited business investment.
After a shock result, no clear plan from the government or years of fighting by Leave campaigners over just what Brexit – never well defined, and often subjective – should happen in practice. Amid this political crisis, businesses froze their investment plans.
As a result, investment is estimated to be close to 18% under its influence and productivity is as low as 4%, indicating reluctance to invest in equipment and projects due to uncertainty.
John Springford of the Center for European Reform said: “The investment strike started in 2016 and lasted until 2021-22, and then started to pick up again as the trade relationship became more certain.
This affects productivity. This means workers do not have the best cut and current capital. [equipment and buildings] Deteriorating, so you definitely assign some GDP losses to that.
“Brexit is more a story of stagnation and slow puncture than recession and rising unemployment.”
Employment has suffered.
After the Brexit referendum, UK unemployment fell to one of the lowest rates since the 1970s, before rising sharply during the pandemic. However, experts say this has obscured the underlying challenges.
First, wage growth has stalled. Average real wages have barely risen since the post-pandemic pick-up, and even after adjusting for inflation, are on average £43 a week higher than the recent fastest growth.
Britain emerged as the worst-performing country in the G7 for the pace of its recovery in labor force participation after the easing of pandemic restrictions, with rising ill-health fueling economic inactivity – when working-age adults are neither in work nor looking for one.
Young people have borne the brunt of weak participation rates, with the number of 16- to 24-year-olds not in education, employment or training (NET) increasing by more than one million, the highest level since 2013.
According to Bloom, employment in the UK is between 3% and 4% of what it would have been in a rest scenario.
Support for Brexit is gone.
Public support for Brexit has steadily declined since the vote to leave, 52%-48%. A YouGov poll last month showed that 70% of Britons support a closer relationship with the EU without rejoining the bloc, its single market or customs union.
More than two-thirds believe that easing into a relationship would be a mistake. The majority – 56% – would rejoin the bloc. Support for reunification is strongest among Green and Labor voters, and weakest among supporters of Nigel Farage’s Reform UK, of whom 83% are opposed.
Net immigration increased, but is now falling.
After Brexit, despite the Leave campaign and the Conservative government’s promises, net migration to the UK increased sharply, peaking at around 1 million a year until June 2023.
After the war in Ukraine and the easing of Covid-19 restrictions, the demand for migration played an important role. But post-Brexit changes to immigration laws also had an impact.
Almost 90% of arrivals came from outside the EU, while net migration from the 27-nation bloc declined. Employers have struggled with staff shortages amid the loss of already readily available EU workers, particularly in construction, hospitality and manufacturing.
Net migration has fallen further – falling to 171,000 last year – amid tighter controls first introduced under the Conservatives and later tightened under Labour.
