The UK Welcomes Its Seventh Prime Minister in a Decade... The Scars Left by Brexit

Economic losses from GDP decline and reduced investment
Rising concerns over political instability
Polls show nearly 50% of respondents express "regret"

Ten years after the 2016 Brexit referendum, in which the United Kingdom voted to leave the European Union (EU), experts are diagnosing that the country has suffered significant economic and political damage. The UK's gross domestic product (GDP) has shrunk, corporate investment has declined, and the nation has experienced substantial economic losses. Additionally, the country has seen heightened political instability, with the prime minister changing seven times during this period.

"UK economy down 4–6% compared to remain scenario"

UK Prime Minister Keir Starmer announced his decision to resign on the 22nd (local time) at Downing Street, London. Photo by AP Yonhap News

According to The New York Times on June 23 (local time), economists have pointed out that Brexit's impact has led to a contraction in trade and investment. The size of the UK economy is now approximately 4–6% smaller than it would have been had the country remained in the EU, and the opportunity cost of Brexit continues to accumulate.

A study led by Professor Nicholas Bloom at Stanford University estimated that Brexit reduced the UK's GDP by up to 8%. While individual economists may cite slightly different figures, there is broad consensus that the UK economy is now 4–6% smaller than it would have been had the country remained in the EU. Previously, the UK’s Office for Budget Responsibility (OBR) had consistently argued that, beginning in late 2021, Brexit would lead to a long-term productivity decline of about 4%.

The increased economic costs are largely attributed to trade friction with the EU. According to the Centre for European Reform (CER), after Brexit, the UK's exports to the EU fell by about 12%, while imports dropped by about 16%. Although the UK has signed 39 trade agreements with 72 countries post-Brexit, these have not compensated for the reduction in trade with the EU. Even now, the EU remains the UK's largest trading partner, accounting for more than 40% of the country's trade.

Corporate investment has also been dampened. The National Institute of Economic and Social Research (NIESR) estimates that uncertainty caused by Brexit has reduced long-term corporate investment by about 4%. While London remains Europe's largest financial hub, some stock trading operations have moved to Amsterdam in the Netherlands, and some asset management work has shifted to Dublin, Ireland.

Economists note that it is difficult to precisely calculate the full cost of Brexit due to various factors, including the COVID-19 pandemic, US tariff policies, the war in Ukraine, and the war in Iran. Nonetheless, recent research consistently finds that Brexit is continuously lowering the UK's economic growth rate.

This outcome is something the UK government had warned about in advance. Just before the referendum, the government cautioned that leaving the EU would deliver "an immediate and profound shock" to the economy. Although the shock took longer to materialize than expected, economists now conclude that Brexit has caused considerable damage to the UK economy, with the costs steadily accumulating over the past decade.

Another Wound: Political Instability

On January 10, 2019, outside the Parliament in London, UK, Conservative Party Member of Parliament Anna Soubry (center), who supported remaining in the European Union (EU), is confronting pro-Brexit protesters. Photo by AP Yonhap News.

The New York Times noted, "Even more striking is the political instability," referencing Prime Minister Starmer’s announcement of his resignation on the 22nd. This comes less than two years after he led his party to a sweeping victory in the general election, winning 412 out of 650 seats in the House of Commons. The Starmer administration took office in July 2024, riding a wave of public backlash against the Conservative government, but ultimately failed to overcome deep political and social divisions.

Public opinion in the UK is also shifting. In a recent poll, nearly half of Britons said Brexit had produced worse outcomes than expected. Another survey showed that more than half of respondents now support rejoining the EU.

With the UK economy suffering from high inflation, rising national debt, and increased borrowing costs, there is growing support for reversing some aspects of Brexit. Andy Burnham, a leading candidate for the next prime minister, has also described Brexit as a "harmful decision."

However, despite the ruling Labour Party advocating a return to the EU, it continues to rule out rejoining the single market, re-entering the customs union, or allowing the free movement of labor. As a result, there is skepticism about the actual likelihood of a meaningful reunion. Analysts also note that Europe shows little interest in renegotiating with the UK.

Anton Spisak, senior researcher at CER, said, "A lot could change in the next ten years," but added, "I don't see major changes happening in the next two to three years." He further commented, "The most significant cost of Brexit is the opportunity cost. Everything that did not happen because of Brexit—that is the real loss."

This content was produced with the assistance of AI translation services.