Brexit - 10 years in retrospect

Ten years after the "divorce of the century," Britain is feeling the full impact of Brexit—the UK's departure from the European Union (EU).

The immediate economic recession predicted by the Treasury , under the direction of then-Finance Secretary George Osborne—a project dubbed a “fear project” by Brexit campaigners—did not materialize. Furthermore, the negative impacts of the Covid-19 pandemic, conflicts in Ukraine and the Middle East, and the US trade wars during President Donald Trump's second term further complicated the overall economic picture of the UK.

British Prime Minister Keir Starmer (left) in a meeting with European Commission President Ursula von der Leyen. Photo: Bruegel.org

However, experts acknowledge that long-term forecasts accurately predicted the reality of Britain 10 years after Brexit: the economy is significantly smaller than expected; trade has been affected; business investment and productivity have stalled; and average household incomes have fallen by thousands of pounds each year...

The Guardian reports that the British pound is currently depreciating compared to its pre-Brexit referendum levels. At the end of June 2016, when the Brexit victory was announced, the pound immediately fell by 10%. This collapse of the pound pushed up the cost of imported goods, creating an inflationary shock that damaged the state budget and caused financial hardship for households across the country. Exporters – who should have benefited from a weaker currency to stimulate exports – failed to capitalize on this advantage due to economic uncertainty clouding business prospects.

A decade later, the value of the British pound has still not recovered to its pre-Brexit levels, causing financial harm to Britons traveling abroad. For comparison, before Brexit, one pound sterling was equivalent to 1.5 USD or 1.31 euros; currently, the exchange rate for one pound sterling is only 1.34 USD or 1.15 euros.

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Alongside this, the UK's economic growth has slowed. According to an independent watchdog within the Treasury, the UK is on track to suffer a 4% loss in national income over the next 15 years. Furthermore, over the past 10 years, the UK's GDP per capita has been between 6% and 8% lower than it would have been without the "divorce of the century".

Brexit has also erected trade barriers, affecting exports of goods from the UK to the EU, even though the EU remains the UK's largest trading partner: In 2025, exports to the EU are projected to reach £385 billion (41% of total exports) and imports from the EU £474 billion (49% of total imports).

The majority of Britons support closer ties with the European Union (illustrative image). Photo: Getty Images

The lack of a clear plan from both the government and the campaigners for leaving the EU led to years of internal debate about how Brexit should be implemented in practice. Amidst this political turmoil, businesses froze their investment plans. Estimates suggest total investment fell by 18%, and labor productivity declined by 4%, reflecting businesses' reluctance to invest in equipment and projects due to concerns about uncertainty.

The Guardian quoted John Springford, an expert from the Centre for European Reform (CER), as saying that the investment stagnation began in 2016 and continued into 2021-2022. This affected labor productivity because workers lacked the best equipment, and machinery and factories deteriorated due to a lack of investment, causing losses to GDP. “Brexit is a story of stagnation and gradual weakening, rather than an immediate economic recession or increased unemployment,” expert John Springford stated.

In fact, unemployment in the UK fell after Brexit to its lowest level since the 1970s, before surging again during the Covid-19 pandemic. However, experts argue that this masked underlying challenges that are now emerging, such as stagnant wage growth; an increase in the number of working-age people who are unemployed, untrained, and unwilling to seek work...

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After a decade, the UK seems to have felt the full impact of its tumultuous separation. A recent YouGov poll shows that 70% of Britons support closer ties with the EU.

Source: https://baolangson.vn/brexit-10-nam-nhin-lai-5096628.html