Brexit is having a “profound and ongoing stifling effect” on UK-EU trade, with new research revealing that British goods exports to the European Union have plunged by 17% since 2021. As small businesses struggle with rising costs and red tape, the report underscores how the negative impacts of Brexit are intensifying and likely to persist for years.
Key Points:
- Trade Decline Intensifies: UK goods exports to the EU are 17% lower than they would have been if Brexit hadn’t happened, with deeper declines seen in 2023 compared to previous years.
- Structural Changes: The research highlights that the UK-EU trade disruption isn’t just a temporary shock but reflects lasting structural changes in trade relations that could endure.
- Hit to Small Businesses: Many small businesses, particularly in industries like food and clothing, are abandoning EU exports due to high costs and complex regulations.
- Recommendations: Researchers urge the UK government to prioritize sector-specific trade agreements, streamline customs with digital tools, and pursue closer regulatory alignment with the EU to ease trade barriers.
- Wider Economic Impact: Since the 2016 referendum, Brexit has been blamed for a 2% to 4% reduction in UK GDP, with long-term forecasts predicting a 4% drop in output compared to a scenario where Britain remained in the EU.
The report serves as a stark reminder of Brexit’s ongoing economic toll. Without significant policy interventions, the UK risks further weakening its position in the global market, making trade improvements with the EU a pressing issue for the government.
