Brexit and Beyond

The UK Economy Post-Brexit: Trade, Investment, and Labor

• The UK's exit from the single market and customs union in 2021 resulted in new rules, paperwork, and checks for companies trading with the EU.
• Trade volumes have recovered to pre-pandemic levels, but the red tape may have deterred some small exporters altogether.
• The variety of goods exported and imported has diminished, and the price of food imported from the EU has risen, making it easier for domestic food producers to compete.
• Trade with the rest of the world has fallen relative to the size of the UK economy, making the UK "less open" and lagging behind other major nations.
• 71 trade deals have been struck, but the vast majority just replicate deals Britain had when it was part of the EU. Talks are still taking place with India and members of a trans-Pacific pact.
• Investment has stalled since the referendum due to uncertainty surrounding Brexit, including the unsettled issue of the Northern Ireland Protocol, which could have been 25% higher if it had continued its pre-referendum trend.
• Leaving the EU also meant changes to the rules on the free movement of labor and the introduction of a points-based immigration system, resulting in 330,000 fewer workers in the UK.
• Sectors such as transport, hospitality, and retail have been particularly hard hit by the lack of workers, resulting in shortages and higher bills for customers.
• A lack of investment means the UK is a less-efficient, lower-earning economy than it could be.
• The UK is the only major rich economy that remains smaller than prior to the pandemic, and Brexit may be a factor.
• Arrangements for industries like financial services, fishing, and electric vehicle parts, cooperation on science, and ways to reduce red tape are still to be settled.
• There are potential gains for the UK economy, but realizing them is a matter of political as well as economic strategy.

The UK Economy Post-Brexit: Trade, Investment, and Labor

• The UK's exit from the single market and customs union in 2021 resulted in new rules, paperwork, and checks for companies trading with the EU.
• Trade volumes have recovered to pre-pandemic levels, but the red tape may have deterred some small exporters altogether.
• The variety of goods exported and imported has diminished, and the price of food imported from the EU has risen, making it easier for domestic food producers to compete.
• Trade with the rest of the world has fallen relative to the size of the UK economy, making the UK "less open" and lagging behind other major nations.
• 71 trade deals have been struck, but the vast majority just replicate deals Britain had when it was part of the EU. Talks are still taking place with India and members of a trans-Pacific pact.
• Investment has stalled since the referendum due to uncertainty surrounding Brexit, including the unsettled issue of the Northern Ireland Protocol, which could have been 25% higher if it had continued its pre-referendum trend.
• Leaving the EU also meant changes to the rules on the free movement of labor and the introduction of a points-based immigration system, resulting in 330,000 fewer workers in the UK.
• Sectors such as transport, hospitality, and retail have been particularly hard hit by the lack of workers, resulting in shortages and higher bills for customers.
• A lack of investment means the UK is a less-efficient, lower-earning economy than it could be.
• The UK is the only major rich economy that remains smaller than prior to the pandemic, and Brexit may be a factor.
• Arrangements for industries like financial services, fishing, and electric vehicle parts, cooperation on science, and ways to reduce red tape are still to be settled.
• There are potential gains for the UK economy, but realizing them is a matter of political as well as economic strategy.