According to Bloomberg, the country’s breakup with the EU has resulted in decreased economic investment and a labor shortage. A report by Bloomberg Economics published in February, claims that the UK economy is still losing billions of dollars yearly due to Brexit.
As per the study, the British economy has been losing almost £100 billion, equal to $124 billion annually, since the country’s 2020 exit from the EU is already 4% smaller than it may have been.
When Britain decided to exit the EU in 2016, did the UK engage in economic self-harm? The evidence to date continues to point to the fact that it did. According to economist Ana Andrade, who co-authored the research with Dan Hanson, the single market exit may have had a quicker effect on the British economy than most other analysts anticipated.
Additional Read: The Departure of More than 500,000 Workers put the UK Economy in Danger
According to analysts, the Brexit referendum in 2016 caused a change in the UK’s economic performance from that of the other G7 nations. According to them, this was brought on by a decline in corporate investment as businesses have been extremely cautious with their expenditure because of uncertainties about their futures outside the single market. Compared to the G7 average of 13%, calculations show that the UK invests 9% of its GDP in its businesses.
Economists say the labor shortage, which affects the UK economy, is also attributed to Brexit. They calculate that there are already 370,000 fewer EU workers in the country than there may have been if Britain had stayed in the union.
The experts also stated that “labor scarcity adds to inflationary pressure in the short-term and restricts potential growth farther out.” That is not good news for an economy with dismal long-term prospects and trend growth of just over 1%.
The economists noted that Brexit has less significantly impacted trade. Still, they cautioned that they would expect commerce to bear the brunt of the damage of leaving the single market over the longer term.
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