The Economics of Brexit

The analyses in this eBook are very much a preliminary and incomplete account of the economic impacts of Brexit. In some cases, they raise as many questions as they answer.
For example, why have UK imports of EU goods fallen so sharply, while UK exports are much less affected, when (in contrast to the EU) the UK has not yet introduced the full panoply of import controls provided for under the TCA? Why has the large fall in the number of EU workers in some sectors – and a corresponding rise in vacancies – not translated into higher wages, at least in relative terms? Nevertheless, the overwhelming weight of the evidence presented suggests that – very much as economists predicted – Brexit has made the UK a less open economy, reduced UK trade in both goods and services, and increased prices for some products. Moreover, despite public scepticism of economists and their forecasts, our verdict is increasingly shared by the wider public (Surridge 2022).

However, as Fetzer points out, aggregate impacts are not the whole story by any means. His analysis suggests not only that the costs of Brexit are very unevenly distributed, but that, perhaps paradoxically, those areas that voted most heavily for Brexit are the worst affected, while London has escaped largely unscathed, at least so far.