UK's economy is £69bn smaller because of Brexit turmoil, says leading think tank

Britain's economy is a startling £69 billion smaller than it would have been if the country had not voted for Brexit, according to a leading think tank.

The Centre for European Reform said the turmoil and uncertainty triggered by the 2016 vote to quit the EU means the economy is 2.9 per cent smaller than it would have been otherwise.

“We have seen a substantial loss of output as a result of slower growth, and the hit to investment is storing up trouble for the future,” said John Springford, deputy director of the CER and author of the analysis.

It showed the “biggest victim” of the Brexit vote has been new investment spending by businesses on capital goods, buildings, software and other assets.

The CER suggests it would have risen by 10 per cent had the UK voted to remain in the EU, compared to the two per cent increase since 2016. 

“Investment is an important driver of productivity growth — which has been woeful since the financial crisis in Britain — and a key determinant of rising living standards,” the CER study, The Cost of Brexit, added. It also stressed that devaluation of the pound since the referendum, which has hiked the cost of foreign holidays, “has yet to translate to the big gains in exports some Brexiteers hoped for”.