Brexit cost UK £27bn in lost trade in first two years, review finds
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Despite fall in trade, LSE study says overall impact was more limited than OBR forecasters first estimated. The damage from Brexit to trade links with the EU cost the UK £27bn in the first two years, but the overall impact was more limited than forecasters first estimated, according to the most comprehensive review of the issue since Britain fully left the bloc at the start of 2021.
Researchers based at the London School of Economics found that trade barriers had been a “disaster” for small businesses and forced thousands to stop trading with EU nations. The academics from the Centre for Economic Performance looked at evidence from more than 100,000 firms, and found that by the end of 2022, two years after the UK signed the trade and cooperation agreement (TCA) with Brussels, total British goods exports had fallen by 6.4% and imports by 3.1%.
The outcome compares with an assessment by the Office for Budget Responsibility (OBR), which has forecast that the UK will suffer a 15% slump in trade, leading to a 4% reduction in national income, over the longer term. CEP researchers said that while it was possible the UK might still experience a fall of the magnitude envisaged by the government’s independent economic forecaster, there would need to be a further deterioration in imports and exports with the UK’s largest trading partner.
Thomas Sampson, one of the report’s authors, said: “We find that, through the end of 2022, the TCA reduced goods trade by less than half as much as the OBR projected. That said, the OBR number is a long-run projection and we only study the first two years of the TCA.
