Story perspectives

Brexit Cuts UK Economy, Services Hit, Small 2025 Relief

6/3/2026

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Summary

Portes Blames Brexit

Jonathan Portes says Brexit left the UK economy smaller than it would have been.
The Trade and Cooperation Agreement cut most tariffs but kept no single-market, forcing firms to face checks and paperwork.
Services firms lost market-access after free movement ended, reducing trade, investment, productivity and straining public finances.
The May 2025 UK-EU ‘Common Understanding’ aims to cut agri-food checks and ease mobility, but gains are small versus the single-market loss.

Summary

Immigration Boosts GDP

The end of free movement sharply cut EU migration to the United Kingdom, which reduced flexible labour in hospitality, agriculture, logistics and food processing.
The new post-Brexit immigration system attracted far more non-EU migrants on work and study routes, more than offsetting the EU decline and shifting the labour market composition.
Analysts estimate the migration shift probably raised total UK GDP, while its effect on GDP per head remains modest.

History

Historical Context

Britain helped shape the 1992 European Single Market, which the EU formalised in 1993 and extended through the 1994 EEA. After Brexit ended UK participation in 2020, the 2025 Common Understanding revives trade links, yet the new Trade and Cooperation Agreement re-introduces customs checks that policymakers hope to ease, especially for agri-food goods.

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Portes Blames Brexit

Jonathan Portes says Brexit left the UK economy smaller than it would have been.
The Trade and Cooperation Agreement cut most tariffs but kept no single-market, forcing firms to face checks and paperwork.
Services firms lost market-access after free movement ended, reducing trade, investment, productivity and straining public finances.
The May 2025 UK-EU ‘Common Understanding’ aims to cut agri-food checks and ease mobility, but gains are small versus the single-market loss.

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