How has Brexit affected the UK economy
Whether you like it or not, the UK has been out of the EU for three years.
A pandemic has since occurred, which was shortly followed by an energy crisis.
Because of this, it has been challenging to determine the exact effects of Brexit.
The most recent figures point to an economic knock, but in surprising ways.
In 2021, the UK will leave the customs union and single market, putting new regulations, documentation, and inspections on some commodities in place for businesses doing business with the EU.
Fears about what would happen to the £550 billion in annual trade between the UK and its closest trading partner arose as a result.
The amount the UK exported to the EU first decreased. According to official statistics, trade volumes returned to pre-pandemic levels once teething issues were resolved. However, one may argue that if Brexit hadn’t occurred, trade might have increased even more.
More than half of the 500 businesses surveyed recently by the British Chambers of Commerce indicated they were still figuring out the new system. Some small exporters may not have even tried because of the red tape. According to an analysis of customs classifications, the variety of the commodities we export has decreased.
Import volumes have returned to pre-pandemic levels, which is a similar narrative. However, researchers at the London School of Economics remind out that the cost of food imported from the EU, such as tomatoes or potatoes, increased in 2020 and 2021, maybe by as much as 6%. That was before the most recent inflation spike.
However, it has also made it simpler for domestic food producers to compete; according to experts, this may have given them a $5 billion boost.
But what is more arresting is the whole picture.
At the height of the pandemic, most countries witnessed the collapse of global trade. Since that time, trade in the other G7 nations has recovered.
