We all knew it was bad. But the true extent of the damage caused by Brexit is beginning to reveal itself in previously unimaginable ways. The contentious decision to leave the EU in 2016 was, according to a new study, the catalyst for the UK’s economic downfall.
And, what’s more, this data has even caused The Telegraph to denounce Brexit as a ‘disaster’ and an ‘economic failure’ this week. Once a proponent of the ‘project fear’ attack line, the right-leaning publication appears to have joined the resistance, following a scathing op-ed penned on Saturday.
ALSO READ: Support for Brexit drops to laughable low – with just 11% seeing it as a success
Brexit had negative impact on GDP, investment, and employment – NBER
According to the National Bureau for Economic Research (NBER), the downwards spiral didn’t just start when Britain formally completed the withdrawal process in 2020, but shortly after the referendum result was confirmed more than nine years ago.
In the aftermath, factors such as ‘elevated uncertainty’ and ‘reduced demand’ put the UK on a path towards disaster. Things have only got worse in the last five years, and the NBER believe that the initial impact assessment actually ‘underestimated’ just how damaging Brexit would be.
Read it and weep…
As per their figures, the UK’s GDP (Gross Domestic Product) had fallen by as much as 8% from where it should be since 2016, with the impact ‘accumulating gradually’ as the years have gone by. Investment into the country is also estimated to have dropped sharply, by roughly 12-18%.
It gets worse. Both employment and productivity have also been severely hampered, with each data set estimated to have been reduced by 3-4% from previous projections within the last decade or so – which might go a long way towards explaining the general malaise Britain is experiencing.
Brexit reset talks stall – as new impact assessment lays impact bare
Keir Starmer and the Labour leadership prioritised a Brexit ‘reset’ in the early days of his premiership – but things have cooled on that front in recent months. As our exile from the EU continues, researchers at the NBER outline how ‘large, negative impacts’ will continue to harm the UK
“Using almost a decade of data since the referendum… These large negative impacts reflect a combination of elevated uncertainty, reduced demand, diverted management time, and increased misallocation of resources from a protracted Brexit process.”
“Comparing these with contemporary forecasts – providing a rare macro example to complement the burgeoning micro-literature of social science predictions – shows that these forecasts were accurate over a 5-year horizon, but they underestimated the impact over a decade.” | NBER