An analysis of Bank of England data on thousands of British companies ten years after the referendum shows that the UK economy has shrunk by 6% since Brexit, the BBC reports.
Looking through the data the bank uses to decide on interest rates, the study analysed the lost growth, trying to model the development curve if Britain had not left the European Union. It concluded that about half of the economic shock was due to surprise and a period of post-referendum uncertainty, while the other half was due to new trade restrictions after the UK left the customs union and the EU single market in 2021.
Some critics have said that the study does not fully reflect the dominance of US investment and technology, as well as the energy crisis that gripped Europe four years ago.
The study’s co-author, Stanford University professor Nick Bloom, said
Britain had been growing rapidly before Brexit and could have kept up with the US at least partially
had the country not decided to leave the European Union, and that data from the Bank of England supports this. The study concludes that Brexit has had a significant economic impact on Britain, but it has been gradual.
The study comes as Bank of England officials have become increasingly outspoken in recent months about the economic impact of Brexit.
Some economists have said it is difficult to model what Britain’s growth would have been if the country had remained in the EU, and that such studies give Brexit too much weight, especially at a time when international crises are following one another.
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