Brexit, four years on: answers to two trade paradoxes

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Publication Date January 2024
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Since the UK left the EU in 2020, its goods exports to the EU did not perform any worse than to the rest of the world, and its services exports grew strongly. However the author's analysis demonstrates that missed growth in goods and services trade accounted for about a £23 billion quarterly hit to UK exports, which was consistent with a GDP reduction of 4-5 per cent compared to a Britain that had remained. Intra-EU goods trade had boomed since Brexit, outstripping Europe’s exports to the rest of the world. As a non-member, the UK’s goods trade missed out on that boom. Similarly, after leaving the EU, UK-based services companies had faced significantly larger barriers to exporting to the EU in areas where the single market was advanced like transport and financial services. In those sectors, Britain’s export growth languished behind other advanced economies. So, if the UK had remained an EU member, its services exports would probably have grown much faster.

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CER Insight: May 2023: Are the Costs of Brexit Big or Small?

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