Yui Mok/PA
It’s a sobering figure: £311 billion. That’s the amount experts now estimate Brexit will cost the UK economy by 2035. While political slogans and promises of “taking back control” once dominated the Brexit debate, the reality of what leaving the European Union means for Britain is becoming increasingly clear—and the price tag is staggering.
Brexit was sold as a pathway to prosperity, with pledges of new trade deals, enhanced sovereignty, and a booming economy. Yet, as we approach the fifth year since officially leaving the EU, the economic fallout is undeniable. The costs of Brexit are already biting, and the financial strain will continue to deepen, leaving the UK worse off for decades to come.
So, where does the £311billion figure come from, and why is it so significant? Economic studies, including those by the Centre for European Reform (CER) and the Office for Budget Responsibility (OBR), have been tracking the economic impact of Brexit since the referendum. According to these projections, the UK’s economy will be 4 per cent smaller by 2035 than it would have been had it stayed in the EU.
This gap in growth translates into a cumulative loss of £311 billion—a sum that reflects diminished trade, reduced investment, and weaker productivity across the country. It’s a direct hit to the UK’s GDP, which could have supported public services, driven business growth, and boosted wages. Instead, this immense economic hole is a stark reminder of the price of Brexit.
At the heart of this financial loss are the new barriers to trade with the European Union. For decades, the UK benefitted from frictionless access to the world’s largest trading bloc, which accounted for nearly half of the country’s exports. That ease of doing business with the EU has been eroded by the introduction of customs checks, regulatory divergence, and complex bureaucracy—now costing UK companies billions each year.
Since Brexit, exports to the EU have fallen, and the UK’s total trade volume is expected to be 15 per cent lower in the long term. British businesses, particularly small and medium-sized enterprises (SMEs), are struggling with the extra costs of exporting, making them less competitive and driving some out of EU markets entirely.
Despite optimistic predictions from Brexiteers about a global Britain striking lucrative trade deals, the deals secured so far have done little to offset the loss of EU trade. For example, the much-touted trade deal with Australia is expected to add just 0.02 per cent to UK GDP over the long term. It’s a far cry from what was promised.
Another key contributor to the £311 billion loss is the collapse in business investment. In the years leading up to Brexit, UK businesses were already putting projects on hold as they waited for clarity on Britain’s post-EU future. Now, with Brexit a reality, investment has flatlined. The uncertainty surrounding future trade relationships and the increased costs of doing business have caused businesses to scale back, relocate to the continent, or delay long-term investments.
The Centre for Economic Performance has reported that Brexit has led to an 11 per cent decline in business investment, a blow to sectors that were once thriving, such as manufacturing, finance, and technology. International firms, particularly in the automotive and pharmaceutical industries, have either moved production to the EU or scaled back operations in the UK to avoid the extra costs of Brexit.
With business investment so crucial to driving innovation, productivity, and long-term growth, the UK’s future economic prospects are now dimmed. And the ramifications will be felt not just by companies, but by workers across the country as job creation and wage growth slow down.
Beyond the macroeconomic forecasts, the £311 billion loss will also have a tangible impact on ordinary Britons. The economic slowdown and rising costs triggered by Brexit are already hitting household incomes. The UK in a Changing Europe estimates that Brexit will reduce real wages by around 2.5 per cent in the long term, while the Resolution Foundation has warned that household incomes will fall by approximately £1,100 by 2030.
The reasons are simple: Brexit has disrupted supply chains, driven up the cost of imported goods, and added to inflationary pressures. Families across the UK are already seeing the impact at the checkout, with food prices rising faster than wages, while energy bills and other essentials remain high. With the economy set to underperform for years to come, the average household will bear the brunt of these costs.
Another key issue arising from the economic damage caused by Brexit is the pressure it’s putting on public finances. The government is already grappling with ballooning public debt following the pandemic, but the economic slowdown caused by Brexit has only made things worse.
A smaller economy means lower tax revenues, which in turn means less money for critical public services like the NHS, education, and social care. At the same time, Brexit has added billions in new costs for government, from maintaining customs infrastructure to supporting industries hit hardest by the new trade barriers.
The promise of extra money for public services, emblazoned on the side of that infamous red bus, has evaporated. Instead, the opposite is true: Brexit is draining public resources, not bolstering them.
As the UK approaches 2035, the consequences of Brexit are becoming increasingly difficult to ignore. The £311 billion economic loss is not just an abstract number on a spreadsheet; it represents lost opportunities, lower wages, and underfunded public services. The vision of a resurgent, independent Britain has been replaced with a far bleaker reality—one where the costs of Brexit will continue to weigh on the country’s future.
Politicians may argue over the merits of sovereignty or global trade deals, but one fact is becoming crystal clear: Brexit is an economic self-inflicted wound. The question now is, how long will the UK keep paying for it?
Related: New poll shows majority of voters want another vote on Brexit ‘within five years’
