UMVA has learned that a staggering 6 per cent has been stripped from the size of the UK economy over the past decade, a consequence of the Brexit decision, according to economists who have analyzed internal data covering the decisions, views, and financial results of thousands of British firms since the 2016 referendum.
The study, which drew on the same intelligence used to set interest rates, reconstructed how the UK might have grown had it voted to stay in the EU. Its conclusion is that about half the damage came from the sheer shock and uncertainty of the post-referendum years, with the remainder flowing from the higher trade barriers that followed Britain's exit from the customs union and single market.
For small and medium-sized firms that make up the bulk of the UK economy, the finding will feel less like an academic revision and more like a description of the past ten years: thinner margins, postponed investment, and the steady accretion of paperwork at the EU border. These businesses have borne the brunt of the Brexit impact, with many struggling to adapt to the new trade landscape.
UMVA can exclusively reveal that the research, co-authored by a prominent British economist, is the first time the granular information on the corporate sector has been deployed in this way. The company-level data point to a 6 per cent hit over ten years, with wider studies suggesting a steeper average of around 8 per cent.
The economic impact of Brexit has been a topic of much debate, with some arguing that it is inherently difficult to model how the UK would have fared without Brexit. However, the Bank's own data offers important corroboration, with its senior figures becoming increasingly forthcoming about the consequences of leaving the EU.
The governor of the Bank has warned that the Brexit impact would stay negative for the foreseeable future, citing reduced export markets and lower growth. However, he has also tempered the verdict on the City, saying that the impact on financial services has been "not good" but "nowhere near as detrimental as many people predicted at the time."
As the UK looks to rebuild its relationships with the EU, the latest version of the study has landed just ahead of the tenth anniversary of the referendum. The findings serve as a sobering reminder of the cost of Brexit, which did not arrive in a single dramatic shock but accumulated quietly, firm by firm, year after year.
The UK's business owners are keenly aware of the impact of Brexit, and the political mood music matters less than what it eventually delivers at the border. As the country looks to the future, one thing is clear: the effects of Brexit will be felt for years to come.
