The UK's economic growth has been a pressing concern over the past decade, with Brexit looming large as a contributing factor. A recent analysis by leading economists reveals that the nation's economic performance since the 2016 referendum has fallen woefully short of expectations. In real terms, per capita GDP expanded by just six per cent between June 2016 and September 2025, while productivity stagnated and real wages rose modestly by seven per cent.
The period from January 2021, when the UK officially left the EU's single market, to the end of 2025 has seen particularly weak growth. Real GDP per head is now barely higher than it was in early 2020, demonstrating an underwhelming increase of less than one per cent over five years. While external factors like the pandemic and energy price hikes have undoubtedly taken their toll, research suggests that Brexit-specific impacts are also at play.
A significant currency shift occurred immediately after the referendum, with sterling depreciating by approximately 10 per cent on a trade-weighted basis. This led to an estimated increase of 2.9 per cent in consumer prices over two years, directly influencing real living standards across the country.
Businesses have also felt the effects, as uncertainty stemming from the referendum result and subsequent political instability dissuaded investment. A pre-referendum poll among professional economists showed that 88 per cent predicted a negative impact on national income over five years following Brexit, with only four per cent anticipating a positive outcome.
Trade barriers have been shown to create costs, particularly in a market as integrated as the EU single market. The UK's significant trade ties with the EU and US pose a substantial challenge in offsetting even minor changes in EU trade.
The analysis by Paul Johnson of the Institute for Fiscal Studies and Robert Johnson of the Centre for Cities underscores the difficulties in adapting to a post-Brexit trading environment.