May 22, 2024

The British economy is suffering from the “long-term” costs of Brexit.

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Protesters supporting leaving the European Union carry flags and banners in London, Saturday, October 19, 2019. © Luke MacGregor/Bloomberg

The UK economy has suffered since Brexit, according to Goldman Sachs, and declining international trade and weak business investment are just some of the reasons.

(Bloomberg) — The United Kingdom's decision to leave the European Union shrank the British economy by lowering growth and raising inflation, according to economists at Goldman Sachs Group, who have since tracked the country's performance compared to similar countries after the 2016 referendum.

The UK's real GDP fell by about 5%, Sven-Jari Steen and colleagues said in a research report published on Friday. The researchers said declines in international trade, weak business investment and reduced immigration from Britain's largest trading partner contributed to this.

“Significant long-term production costs of Brexit”

“The evidence points to significant long-term production costs of Brexit,” they wrote. “The UK has performed much worse than other advanced economies since the 2016 EU referendum.”

Goldman's conclusion is largely consistent with other estimates of the impact of Brexit. The Office of the Budget Controller, the UK's official financial watchdog, said last year that Brexit would likely cut economic output by 4%. The Bank of England's Jonathan Haskell said a year ago that Brexit had cost each British household an average of £1,000 ($1,260).

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Not all of Britain's economic problems are due to Brexit

Prime Minister Rishi Sunak has been struggling to make good on his promise to boost the economy since taking office at the end of 2022. Economists are divided over whether this week's data will show that the UK slid into a technical recession late last year.

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However, Goldman said the UK's economic problems are not all due to Brexit, citing the pandemic and the energy crisis in the wake of Russia's invasion of Ukraine as significantly weighing on growth.

Some economists, especially those more supportive of the decision to leave the EU, have argued against using the so-called doppelganger approach to analyze the impact of Brexit. Like the British government, they point out that the UK's real GDP has outperformed that of Germany and Italy since the referendum.

Written by Joe Easton with assistance from Philip Aldrick and Andrew Atkinson.

We are currently testing machine translations. This article was automatically translated from English to German.

This article was first published in English on February 12, 2024 on “” was published as part of the collaboration, and is now also available in translation for readers of the IPPEN.MEDIA portals.