Crisis in the UK: How Brexit damaged the UK economy

Between the effects of the Covid-19 pandemic and those of the energy crisis, it is difficult to calculate the direct impact of Brexit on the British economy since January 2021. To the point of sparking numerous debates among economists.

But if the figures are discussed, there is nevertheless a consensus: the exit from the European Union has considerably deteriorated the economic performance of the United Kingdom.

In an article published on December 21, the Center for European Reform (CER) estimated that in the 2nd quarter of 2022, UK GDP was 5.5% lower than it would have been if the country had remained in the EU .

According to the Financial Times, such a trend would represent an annual loss of more than 100 billion pounds sterling for the British public finances.

The depreciation of the pound

In addition, a direct economic consequence of Brexit particularly crystallizes attention and generates consensus: the depreciation of the pound sterling by more than 10% after 2016, and which continues until today.

This fall significantly increased the price of imports, costs for businesses and inflation, but failed to boost wages or the competitiveness of the British economy.

As a result, real wages fell by 2.9%, which generated a loss of £870 per year on average for British households, fueling strong discontent.

Read alsoGreat Britain: a first, nurses go on strike

Finally, the departure from the EU has compromised certain structures of the British economy.

Heavily dependent on its natural gas imports, Great Britain no longer benefits from the collective bargaining power of the European Union and is preparing to suffer an even greater gas price spike than its European neighbours.

It has also been weakened in terms of international trade by leaving the trade agreements in which the EU is engaged.

As a replacement, the free trade agreement signed with Australia in December 2021 should only increase British production by 0.08%.

Renegotiate with the EU?

“No!

»

From there to questioning Brexit?

Prime Minister Rishi Sunak, an early supporter of "Leave", signaled the end of the game.

“Let me be unequivocal about this.

Under my leadership, the UK will not seek any relationship with Europe that is based on alignment with EU laws,” he said on November 25.