As the Brexit vote approaches its 10th birthday, the UK economy has decided to mark the occasion with a decade-long party where everyone got poorer, trade got harder, and the pound went on an extended holiday from which it never quite returned.
The immediate recession that Treasury forecasters predicted - and which the Leave campaign dismissed as “project fear” - didn't happen. The COVID-19 pandemic, wars in Ukraine and Iran, and Donald Trump's trade battles also made the picture fuzzier than a 2016 webcam. But experts agree that the long-term forecasters were basically right: the economy is significantly smaller than it would have been, trade has suffered, business investment has stalled, and families are thousands of pounds worse off each year.
Charlie Bean, a former Bank of England deputy governor who reviewed the Treasury forecasts, had some harsh words for George Osborne: “Osborne has a lot to answer for when he was basically saying, ‘Treasury analysis shows - look, there is going to be a deep recession tomorrow.’ That was really misrepresenting what you could take from it and overselling it, obviously to try and win the argument politically.” In hindsight, the world didn't fall off a cliff immediately - but the long-run assessment was “in the right ballpark.”
The pound had a dramatic night on 23 June 2016. As Nigel Farage appeared ready to concede defeat, the currency gained - then early Leave victories in Sunderland prompted a 10% plunge, its biggest ever one-day fall. The collapse drove up import costs, triggering an inflation shock that damaged public finances and hit households nationwide. Exporters, who typically benefit from a weaker currency, failed to take advantage as uncertainty clouded trade appetite. A decade later, the pound has never returned above its pre-Brexit level, hitting holidaymakers in the pocket: from close to $1.50 and €1.31 just after polling closed, it now stands at $1.34 and €1.15.
The Brexit recession never materialised partly because the Treasury forecast assumed an immediate no-deal departure, rather than continued EU membership until 31 January 2020, plus an 11-month transition period and subsequent deals. According to the Office for Budget Responsibility, the UK is on track to suffer a 4% hit to national income over 15 years. Analysis by Nick Bloom of Stanford and others shows that UK GDP per head is between 6% and 8% lower than it would have been without Brexit, based on performance relative to 33 other advanced economies. “The statistics are really clear: the UK has grown more slowly after Brexit than before,” Bloom said. “I don’t see anything else that would open up this gap with the UK and everyone else.”
Brexit erected trade barriers that hit goods exports. The EU remains the UK’s largest trading partner: in 2025, exports to the bloc were worth £385bn (41% of all UK exports) and imports £474bn (49% of the total). Since the end of the transition period on 31 December 2020, growth in UK goods exports has slowed relative to the G7, while service exports performed more strongly. The OBR estimates this is because the UK-EU trade and cooperation agreement Boris Johnson signed created more friction for goods than services. Exporters face more red tape and border delays. Bloom compared the situation to a shop moving from the town centre to the outskirts: “You make it harder to get there and back, and not surprisingly there is less demand.”
After the shock result, no clear plan from the government or Leave campaigners led to years of infighting over what Brexit should actually be. Amid that political turmoil, businesses froze their investment plans. Investment is estimated to be close to 18% lower than it would have been under Remain, and productivity up to 4% lower. John Springford of the Centre for European Reform said: “The investment strike started in 2016 and continued through to 2021-22, and then it started to rise again once certainty about the trading relationship had been established. Brexit is more a story of stagnation, and a slow puncture, than of recession and rising unemployment.”
Unemployment fell after the referendum to among the lowest rates since the 1970s, before rising sharply during the pandemic. But wage growth stagnated: average real wages barely grew until after the pandemic, and even with recent faster growth are only £43 a week higher on average after inflation. Britain emerged as the worst-performing G7 country for the pace of recovery in workforce participation after pandemic restrictions eased, with rising ill-health pushing up economic inactivity. Young people have borne the brunt: the number of 16- to 24-year-olds not in education, employment or training (Neet) has risen to more than a million, the highest since 2013. According to Bloom, employment in the UK is between 3% and 4% lower than it would have been under Remain.
Public support for Brexit has steadily fallen since the 52%-48% Leave vote. Polling last month by YouGov shows 70% of Britons support a closer relationship with the EU without rejoining the bloc, its single market or customs union. More than two-thirds think looser ties would be a mistake. A majority - 56% - would back rejoining outright. Support to rejoin is strongest among Green and Labour voters, and weakest among backers of Nigel Farage’s Reform UK, of whom 83% are opposed.
Despite Leave campaign promises and Conservative government pledges, net migration to the UK rose sharply after Brexit, reaching a record high of almost 1m in the year to June 2023. The war in Ukraine and pent-up demand after COVID played a role, but changes to migration rules after Brexit also had an impact. Almost 90% of arrivals have been from outside the EU, while net migration from the 27-country bloc has fallen. Employers have struggled with staff shortages amid the loss of previously readily available EU workers, particularly in construction, hospitality and manufacturing. Net migration has since fallen to 171,000 last year amid tougher controls first introduced under the Conservatives and tightened further under Labour.