The UK faces a staggering economic blow of £311 billion by 2035 due to Brexit, according to expert estimates. While the Labour Party focuses on a £22 billion hole in public finances, the long-term financial fallout from leaving the EU threatens to be far more damaging.
Economic studies from the Centre for European Reform (CER) and the Office for Budget Responsibility (OBR) project that Brexit will leave the UK economy 4% smaller than it would have been had the country remained in the EU. This translates into a £311 billion loss, reflecting diminished trade, reduced investment, and lower productivity across the country.
The main driver of this economic hit lies in new trade barriers with the EU. Since leaving the bloc, the UK has seen exports to the EU fall, with businesses—especially small and medium-sized enterprises (SMEs)—grappling with increased costs. Optimistic predictions of new global trade deals have yet to materialise meaningfully, with the much-publicised Australia deal expected to add just 0.02% to UK GDP.
Investment in UK businesses has also taken a hit, with an 11% decline since the Brexit referendum. Many companies have relocated operations to the EU or scaled back investment in the UK due to trade uncertainty and increased costs. This decline in investment is now casting a shadow over the country’s future economic growth.
For ordinary households, the effects of Brexit are being felt through higher prices, with inflation pushing up the cost of goods and services. Real wages are forecast to fall by 2.5%, while household incomes could drop by £1,100 by 2030, according to estimates. This economic strain is also putting pressure on public finances, limiting the government’s ability to invest in key services like the NHS and education.
As the country looks to the future, the question remains: how long will the UK continue to pay the price for Brexit?
You may also like: Is Brexit on borrowed time? Majority of voters support another vote within five years
