Brexit will leave UK £300bn worse off by 2035, say economists

Brexit is set to leave Britain’s economy £311bn worse off by the middle of the next decade, a damning new report by top economists has found.

The scathing study by Cambridge Econometrics found that the decision to leave the EU had already cost the UK £140bn.

The shock findings put the scale of the damage far higher than previous warnings by independent economists that Brexit caused a £33bn loss to the economy.

The new report warned that Britain will continue to have lower investment, weaker trade and fewer jobs in the decade ahead as a consequence of being outside the bloc.

The Cambridge study – commissioned by London mayor Sadiq Khan – said the country will have three million fewer jobs by 2035 than if it had stayed inside the EU.

And the economists estimated that Brexit will be responsible for a mammoth 10 per cent hit to Britain’s gross value added (GVA) – the overall value of goods and services – by the same date.

Using data Office for Budget of Responsibility data and forecasts based on the organisation’s data, the report predicts that the UK’s GVA will hit £2,771bn by 2035.

But this is £311bn lower than the £3,082bn GVA figure the nation would have reached without deciding to leave the EU.

Mayor of London Sadiq Khan said report showed ‘Brexit isn’t working’ (PA)
Mayor of London Sadiq Khan said report showed ‘Brexit isn’t working’ (PA)

The economists worked to isolate the “Brexit effect” from other factors such as Covid and the Ukraine war in its modelling.

They found Britain will have 32 per cent lower investment, 16 per cent lower imports and 5 per cent lower exports by the middle of the next decade than without Brexit.

The study also found that Brexit would further widen the productivity gap between the capital and the rest of the country.

Shyamoli Patel, principal economist at Cambridge Econometrics, said: “Our study reveals that London’s economy would have grown faster if Brexit hadn’t taken place.

“Looking ahead, we project that Brexit will continue to have an impact on the UK and London economies in the medium term.”

A majority of voters believe Brexit has damaged the economy (PA)
A majority of voters believe Brexit has damaged the economy (PA)

The Labour mayor of London said the findings showed it was “now obvious that Brexit isn’t working”.

In speech at Mansion House on Thursday evening, he said: “The cost of Brexit crisis can only be solved if we take a mature approach and if we are open to improving our trading arrangements with our European neighbours.”

Mr Khan – who has called for a debate on re-joining the EU single market – added: “I agree with the shadow foreign secretary [David Lammy], who has said we urgently need to build a closer relationship with the EU.”

However, Labour has insisted it will keep Britain out of the single market and customs union if it wins power at the 2024 general election.

Leader Sir Keir Starmer has offered a vague promise to seek a new veterinary agreement to ease current trade friction, and examine Boris Johnson’s trade deal when it comes up for review in 2025.

The most recent Opinium poll showed that more than 60 per cent of voters feel Brexit had been bad for prices in the shops, and 53 per cent said it had hampered the UK’s ability to control immigration.