A Decade After Brexit Shows Mixed Impact on UK Trade and Investment

A decade after the United Kingdom left the European Union, research shows that trade with the bloc has contracted while the services sector has expanded. Export data compiled by the UK Trade Policy Observatory and university studies reveal a 14% drop in goods exports to the EU and a 10% decline in imports compared to 2019, with the worst export year recorded in 2025. By contrast, services exports to the EU have risen 57% over the same period, driven by accounting, legal and consultancy firms, and non-EU services exports are up 49%.

Economists who have modelled a counterfactual scenario—what the economy might have looked like without Brexit—generally agree that the difficulty of trading with the EU accounts for roughly half of the estimated output loss, which ranges from 3% to 8% according to various studies. The remaining impact is attributed to the prolonged political and regulatory uncertainty surrounding the Brexit process.

Business investment has also underperformed. Analyses by former Bank of England economists estimate a reduction of about 1.3% of GDP, equivalent to a £29 billion shortfall, while other research places the decline in investment at 12%-13% relative to pre-referendum trends.

The pound’s depreciation after the 2016 referendum has made imports more expensive but has helped exporters by lowering the price of UK goods abroad. New trade agreements, such as the UK-India deal, have provided some benefits, though overall gains from post-Brexit trade deals are projected to be modest.

Sector-specific examples illustrate the broader trends. A Bristol start-up that produces electric radiators saw its EU-bound sales fall from 40% of total exports in 2020 to 5% in 2025, citing increased paperwork and regulatory hurdles despite zero-tariff arrangements. Similar challenges have affected smaller firms, with HMRC data showing that 16,400 companies stopped exporting to the EU between 2019 and 2023.

Analysts caution that global events—including the COVID-19 pandemic, the war in Ukraine and recent energy price shocks—also influence the economic picture, making precise attribution to Brexit alone difficult. Nonetheless, the consensus among academic studies is that the UK economy is smaller today than it would have been had it remained in the EU, with per-capita output estimated to be 6%-8% lower.

Policy discussions continue as the UK government considers further alignment with the EU on goods trade, while political parties debate the merits of deeper integration or a return to earlier customs arrangements. The next UK-EU summit, slated for later this year, is expected to address these ongoing trade frictions.