- Brexit 10 years on: Neither collapse, nor renaissance. As the UK looks for its 7th Prime Minister in 10 years, this week also marks a decade since Brexit roiled markets and divided forecasters. Predictions ranged from economic collapse to a renaissance. A decade later, we take a hard look at which projections came through and which failed to pass. The outcome has been more nuanced that many expected, with indicators pointing to both economic strengths and weaknesses — not all of them Brexit related.
- Britain’s Economic Backbone: The knowledge economy, tech and clean energy. UK ICT exports to the EU have almost doubled since Brexit, demonstrating the continued competitiveness of Britain's knowledge economy. The UK remains the world’s second-largest exporter of financial services, accounting for 21% of global exports, while deepening its provision of financial services to EU markets. In private markets, the UK continues to attract more venture-capital funding than any European competitor. Between 2020 and 2026, it raised roughly USD164bn. Since then, London has retained much of its global financial importance. The UK still accounts for nearly 50% of global OTC interest-rate derivatives trading and almost 38% of global foreign exchange turnover. In clean energy, the UK has emerged a leader within Europe. Wind generation has increased by 130% since 2016, reducing the UK’s fossil dependence while enabling a successfully phased out coal in 2024.
- Burned by Brexit: Dragging growth, trade frictions and lagging Leavers. Independent studies estimate that GDP would have been 2 to 4% larger without the political instability and trade friction triggered by Brexit. Since 2016, “Leave” regions have generally underperformed compared to the UK as a whole: 59% of the population of the ‘’Leave’’ areas have seen their regions fall further behind national income per capita average. Since the vote and the formal exit from the bloc’s economic structures on 1 January 2021, growth has relied increasingly on foreign-born workers, which has fueled more than half of GDP expansion. Brexit has increased frictions and reduced trade flows. While the EU remains the UK's largest trading partner, structural estimates suggest UK-EU trade is around 21% lower for goods than it would have been without Brexit. New trade agreements and diversified supply chains with the US, China and Commonwealth countries have failed to match the scale of the economic ties previously enjoyed within the EU. UK assets continue to trade at a discount relative to international peers.
- A lasting lesson of the 2022 mini-budget crisis is that fiscal credibility matters. Investors now demand a structurally higher risk premium on UK assets against a backdrop of rising fiscal imbalances. Equity markets, where UK stocks have underperformed both US and European peers in the past decade, reflect this premium. In private markets, the magic has faded into a priced-in discount. A decade on, Brexit's imprint reads through the UK's two largest private-capital engines, private equity and venture. UK investments were 12–18% below a no-Brexit path as of 2025, a one-off level shift now cleared into a structurally higher cost of capital. Private equity has proved resilient, but increasingly as a US funded value trade rather than home grown momentum with compressed valuations turning UK companies into take-private targets for US capital.
- Beyond Brexit: Identifying and implementing solutions for the future. The UK scores high on business creation, labor-market flexibility, higher education and research, compared with many other advanced economies. This indicates that domestic bottlenecks — exposed by Brexit but not caused by it — are the root of the country’s disappointing growth performance. The government has identified many of these issues, but needs to push further. Priority actions should include:
- Accelerating planning reform,
- Increasing investment in housing and energy infrastructure,
- Strengthening support for innovation and strategic industries,
- Treating NHS reform as an economic priority, and
- Addressing the slow diffusion of new technologies from frontier firms to the broader economy.
- A revamp of fiscal rules, combined with reforms to pensions spending and property taxation as well as broadening the VAT base, would help redirect scarce public resources toward deficit reduction and investment, with an eye to defense. Unlike the EU-27, Britain has staged no distinct post-2022 rearmament inflection. The UK government has committed to increase defense spending to 2.5% of GDP by April 2027, and 3.0% target by 2030, but they are not set in stone. The cooperation map looks busy — AUKUS with the US and Australia, GCAP with Japan and Italy, a privileged partner track toward the EU's SAFE instrument — yet it reads as a catalog of commitments rather than tangible delivery. Government investment would help attract investors and domestic defense companies to commit capital to UK capacity. Reintegrating more closely with European energy markets would generate meaningful economic benefits. High energy prices caused by the UK leaving the EU Internal Electricity Market, successive energy supply crises and grid bottlenecks linked to the rapid expansion of renewable energy have continued to undermine industrial competitiveness. Divergence between UK and EU carbon markets also risks creating new trade barriers for energy-intensive industries. Reintegrating energy and carbon markets could help reduce friction costs, stabilize power prices and improve supply security.