Today in Brexit, Day 3,652: Brexit Turns 10

A decade ago, the UK voted to leave the European Union, stunning observers both here and worldwide, based on financial publications we follow. Whilst some commentators anticipated a Brexit economic boom once free of burdensome EU regulations, most projections we read predicted a Brexit bust. At the time, we largely thought the debate was overegged, with change likely to be too slow-moving to mean much for markets and other factors likely to loom larger for UK gross domestic product (GDP, a government-produced measure of economic output). And that is mainly how it went, with the UK’s stocks and economy doing overall fine and following global trends these last 10 years.^[i] To us, Brexit’s 10-year anniversary reminds investors seemingly seismic political events aren’t automatically paradigm shifts for the economy or markets.

Today’s retrospectives focus mostly on how Brexit supposedly left the UK poorer by knocking trade and economic growth. A widely cited research report estimates UK GDP per head is -6% to -8% lower than it would have been without Brexit.^[ii] Sounds dramatic, but this potential, sans-Brexit UK GDP is based on a weighted group of 33 “comparable countries”—of which the US (61%), Estonia (11%) and Greece (10%) comprise over 80% of the basket.^[iii] Those are curious comparisons, in our view, especially considering Germany and France aren’t included.^[iv] Whilst experts can cobble any sort of combination of conditions to calculate a possible result, the counterfactual is impossible to know, in our view. All of these models require assumptions about how things would have unfolded in a parallel universe. Forecasts of an alternate future. Considering how spotty we find forecasts of the actual future often turn out to be, modelling Brexit what-ifs is probably fruitless, in our experience, likely amounting to an exercise in bias and straight-line math whichever side of the argument you are on.

Consider, too, some of the confounding variables, like trade deals. For instance, the UK’s annual exports to the rest of the world surpassed exports to the EU for the first time in 2015 (£150 billion to £134 billion).^[v] That gap has only widened over the following decade, with non-EU exports hitting £203 billion annually to EU exports’ £181 billion in 2025.^[vi] Would such strong trade growth with the rest of the world have happened if the UK was still a part of the EU and beholden to Brussels’ existing trade agreements with no ability to sign new ones of its own? Instead, upon leaving the EU, the UK made deals across the globe, including joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.^[vii] Consider, too, would commerce look materially different in 2020—when the UK was transitioning out of the EU—as the pandemic roiled trade globally? Would Brexiting have stopped American tariffs and US President Donald Trump’s Liberation Day last year? Most likely no, in our opinion. Instead, the UK would have had to rely on EU dealmaking, which took longer than the UK’s swift agreement.^[viii]

What we can do is look at what actually happened, and on that front, the UK hasn’t fared as poorly as many presume, based on our research. Contrary to 2016 Project Fear rhetoric, the UK didn’t enter recession after the vote to Leave—nor has its economy perpetually sagged since Brexit became official at 2020’s end.^[ix] Excluding 2020 and 2021 for their pandemic-related distortions, quarterly UK GDP contracted just twice from Q2 2016 – Q1 2026.^[x] Moreover, late-2023’s quarterly dips—which headlines we follow called a technical recession—were shallow and didn’t necessarily meet the Office for National Statistics' recession criteria, in our view.^[xi] Analysis at the time blamed that economic weakness on inflation (broadly rising prices economywide), a flagging labour market and bad weather—all unrelated to Brexit.^[xii] Also note: Germany’s GDP did worse, and it remained a fully fledged EU member.^[xiii]

Now, we acknowledge Brexit probably added uncertainty in the form of altered regulations and compliance costs—which likely weighed on business investment as companies opted to wait and see how the rules would change. But if leaving the EU was indeed a big bad for Britain, we find it logical to presume trade data should bear this out since the UK was losing unfettered access to the EU single market—and that doesn’t appear to be the case.

Whilst UK goods exports to the EU trended downward since 2017, they actually peaked in 2006—indicating their post-Brexit trend isn’t a historical anomaly. (Exhibit 1) Moreover, goods exports to EU and non-EU nations remain below pre-COVID highs, suggesting to us the UK’s trade story is less about Brexit and more about the economy’s long-term evolution from physical goods to services. You can see this even more clearly in UK services exports to both the EU and non-EU partners. These have been trending upward with little interruption over the past 28 years. (Exhibit 2) To us, that reflects ongoing robust demand for the UK’s world-class services business (e.g., financial services), pouring cold water on the notion that Brexit was going to diminish London’s status as a global financial hub.

Exhibit 1: UK Exports in Goods to the EU and Non-EU Nations

Source: Office for National Statistics, as of 22/6/2026. UK annual goods exports to the EU and non-EU, inflation adjusted, 1997 – 2025.

Exhibit 2: UK Exports in Services to the EU and Non-EU Nations

Source: Office for National Statistics, as of 22/6/2026. UK annual services exports to the EU and non-EU, inflation adjusted, 1997 – 2025.

A decade on, we have seen chatter about whether the UK would benefit from moving closer to the EU—perhaps even rejoining. That speculation seems to stem mostly from offhand comments by those jockeying to succeed Prime Minister Keir Starmer (comments which some have already walked back).^[xiv] Whilst politicians relitigate Brexit, it isn’t clear the public has an appetite to reopen the can of worms. Based on our review, surveys often claim to show Brits overall favour rejoining, but this rests on general questions and often doesn’t delve into the costs of rejoining. When surveys are more detailed, the results look different. One June poll found nearly 60% of adults are unwilling to accept fewer rule-making powers for greater access to the EU’s single market.^[xv] Even in more favourable surveys, respondents say they would support a closer economic EU relationship—but not at the price of rejoining the bloc.^[xvi] On the other side, EU citizens appear open to welcoming Britain back, but senior European diplomats and officials warn any re-accession process is likely to stretch beyond a five-year parliamentary term.^[xvii] To us, this looks more like a political talking point than a market driver, for better or worse.

Now, Brexit has been a boon for furniture movers in Westminster: There have been six PMs since the 2016 vote (soon to be seven), as many as there had been in the prior 37 years pre-Brexit. But outside politics, Brexit’s economic implications have been overstated, in our view—a reality we think markets have long since recognised.