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The economic verdict a decade after Brexit is one of 'resilience without revival,' according to Allianz Research, as Britain faces its seventh prime minister in ten years. The UK's departure from the EU has left output roughly 4% smaller than it would have been, employment 2% lower, and consumer prices 0.7% higher, estimates Deutsche Bank Source: Euronews. While pre-referendum forecasts of immediate recession and an 18% housing crash proved wrong, the long-term costs are visible in trade and investment.
Goods trade with the EU is around 21% lower than projected Source: Euronews. Business investment stalled amid uncertainty, and productivity growth slowed. However, Britain has leaned into services: ICT exports to the EU nearly doubled, and London remains a top financial hub, handling nearly half of global interest-rate derivatives trading Source: Euronews.
The UK has had six prime ministers since the 2016 vote, compared to four in the 19 years prior. On June 22, Prime Minister Keir Starmer resigned after a collapse in Labour support and the rise of Reform UK, likely paving the way for former Manchester mayor Andy Burnham Source: Euronews. Political uncertainty itself has carried economic costs, Deutsche Bank notes.
Dire predictions didn't materialize: the economy kept growing, unemployment fell to 4%, and house prices rose 7% Source: Euronews. The one clear miss on forecasts was sterling, which plunged and never fully recovered.
“Allianz captures it in three words: 'resilience without revival'.”
“Deutsche Bank... estimates Brexit has left output roughly 4% smaller, employment around 2% lower and consumer prices about 0.7% higher than they would otherwise have been.”
“Starmer announced his resignation outside Downing Street, telling supporters he had heard his party's answer on whether he should lead it into the next election and accepted it 'with good grace'.”
“Allianz notes that the UK has had six prime ministers since the referendum, compared with four during the entire 1997-2016 period.”
“Where the forecasters were vindicated... was on sterling, which dropped sharply, feeding through into higher inflation, and a decade later has never fully recovered against the dollar or the euro.”