Trend in GDP growth
Before the Brexit vote in 2016, the UK economy was growing faster than most G7 economies (see Figure 4.15).
The UK’s annual GDP growth rate then dropped to the middle of the G7 in 2018 and 2019. With the arrival of Covid in 2020, the UK plunged to the lowest of the G7. In 2022, the UK responded initially by growing the most strongly.
However, by 2024, the UK had slipped back to the bottom of the G7, before moving to mid-table by mid-2025. This reflected that Germany and France have performed poorly since 2019 for different reasons, which lowered the recent G7 average.
Figure 4.15: UK GDP growth vs G7 (2015-2025)
By Q3 2025, the UK economy had grown by 5.3% in real terms over its pre-pandemic level of Q4 2019, putting the UK fifth of the G7, above Japan and Germany but behind France, Italy, Canada and the US (see Figure 4.16 from the November 2025 edition of the regular House of Commons Briefing ).
Figure 4.16: Comparisons of G7 GDP change Q2 2025 compared to pre-pandemic level
Source: OECD Data Explorer
Economic impact
Economists face two challenges: estimating the long-term Brexit impact and deciding how much has already happened.
However, they agree that the main Brexit impacts drive weaker economic performance. These impacts are:
- uncertainty;
- reduced productivity;
- reduced trade:
- non-tariff barriers on UK-EU trade which disadvantage the UK;
- lower trade openness and volumes;
- immaterial benefits from new UK trade deals.
- weaker business investment;
- reduced EU immigration leading to labour shortages offset by increased non-EU immigration.
The Office of Budget Responsibility (OBR) puts the Brexit impact at a long-run loss of 4% of GDP. The OBR figure is the average of thirteen studies from reputable organisations between 2016 and 2019 that assessed the impact of replacing EU membership with a Free Trade Agreement.
More recent studies assess the impact as much higher: 5-6% (National Institute for Economic and Social Research, 2023), 8% (Goldman Sachs, 2024) and 6-8% (National Bureau of Economic Research, 2025).
In June 2025, the Constitution Society published a report by John Springford, which assessed the Brexit impact nine years on and concluded the impact was around 5%. (He developed the well-regarded doppelgänger approach to assess how the UK would have performed against similar economies, if it had remained an EU member.)
Estimates of the economic impact of Brexit that has already happened range from 2% to 8.0% of GDP:
- NBER estimated the cumulative economic impact by 2025 was 6-8%;
- Professor Jonathan Portes of Kings College London argued for 2-3% by 2023;
- NIESR put the impact to the end of 2023 at 2.5%;
- Goldman Sachs put it at 5%.
If we ignore the higher estimates and assume the OBR figure of 4% has already happened, Brexit would have reduced current annual GDP (of just under £3 trillion in nominal terms) by about £125 billion, and shrunk the tax revenues flowing into the public finances by nearly £50 billion. The higher Brexit impact from the NBER study is double the OBR figure.
Sources:
National Bureau of Economic Research, The Economic Impact of Brexit, November 2025
House of Commons Library, GDP – International Comparisons: Key Economic Indicators, November 2025
OBR, Brexit analysis, July 2025
The Consitution Society (in association with the Federal Trust), The economic impact of Brexit, nine years on: was the consensus right?, June 2025
Goldman Sachs, The Structural and Cyclical Costs of Brexit, February 2024
NIESR, Revisiting the impact of Brexit, Autumn 2023
Professor Jonathan Portes, CEPR, The impact of Brexit on the UK economy: Reviewing the evidence, July 2023
Jonathan Springford, Centre for European Reform, Are the costs of Brexit big or small?, May 2023
Trade openness
Trade openness is the ratio of goods and services trade to GDP and indicates how much an economy benefits from trade. Trade in this context is the sum of imports and exports. The ratio depends on structural, historic and cultural factors which means that the relative position of one country to another should not normally change dramatically.
The G7 has an average trade openness of 42% with a wide range, bounded by the US with the low ratio of 25% and Germany with the high ratio of over 80% (see Table 4.5). Figure 4.17 shows trends in indexed ratios to highlight the relative changes between countries (with Q4 2018 being 100).
As expected, the UK experienced a very large fall trade openness after 2018. This is consistent with the UK putting up trade barriers with the EU’s single market, resulting in reduced trade growth. The UK’s trade openness has since grown but more slowly than its European peers, apart from Germany which has declined.
The bottom bound in the chart, the US, has also declined as a result of its policy choices and is likely to continue to do so as its new import tariffs take effect.
Figure 4.17: Trade openness
Table 4.5: Trade openness
| 2015 Q1 | 2018 Q4 | 2025 Q2 | 2025Q2 - 2018Q4 | |
|---|---|---|---|---|
| Canada | 63.7% | 63.6% | 60.0% | -3.6% |
| France | 59.0% | 63.6% | 63.9% | 0.3% |
| Germany | 72.1% | 75.9% | 80.3% | 4.3% |
| Italy | 52.6% | 57.3% | 58.9% | 1.6% |
| Japan | 31.5% | 33.6% | 36.3% | 2.7% |
| United Kingdom | 57.6% | 61.5% | 62.0% | 0.5% |
| United States | 25.4% | 25.8% | 25.2% | -0.6% |
| G7 weighted average | 40.5% | 42.3% | 41.8% | -0.5% |