In the months since Boris Johnson signed his post-Brexit trade deal with the European Union, the coronavirus has masked the economic damage of leaving the bloc. As the pandemic drags on, the cost becomes clearer — and voters are taking notice.
Brexit has been a drag on growth. The Prime Minister hailed the signing of the trade deal as the moment Britain regained control of its destiny. But a November poll by Savanta Comres shows that a majority of the British population would now vote to join the EU.
In recent days, David Frost, Johnson’s key Brexit negotiating partner, resigned, becoming the third Brexit minister to step down.
A year after the trade deal was signed, here’s a look at the impact of Brexit on UK businesses and the economy.
Britain’s trade with the EU has shrunk since the country left the bloc as businesses are hit with new customs formalities and controls.
In October, UK goods trade with the EU was 15.7% lower than it would have been had Britain remained in the EU’s single market and customs union, modeled by the Center for European Reform, an independent think tank.
Even before Britain completed its separation from the EU at the end of 2020, Brexit had shrunk the size of the UK economy by around 1.5%, according to estimates by the Office for Budget Responsibility. This was due to a decline in business investment and a shift of economic activity to the EU in anticipation of high trade barriers.
Brexit has exacerbated the labor shortage in the UK. 200,000 EU nationals left Britain in 2020, pushed back by tougher immigration rules.
Brexit has prompted financial companies to move at least some of their operations, staff, assets or legal entities out of London to the bloc – but the change has been less significant than expected, in part because the pandemic has hampered staff moves. UK financial firms, meanwhile, are still waiting for full access to the EU single market.