While the debate leading up to the 2016 referendum for Brexit was rife with promises of prosperity and opportunities, the reality, has been far from rosy
The decision by the United Kingdom to leave the European Union, commonly known as Brexit, was a historic moment that promised to bring significant changes to the nation's economic landscape. But the reality has been quite different. The latest figures speak for themselves. Monthly real gross domestic product (GDP) is estimated to have grown by 0.2% in August 2023, following a fall of 0.6% in July 2023. Looking at the broader picture, GDP increased by 0.3% in the three months to August 2023, with growth in all sectors. Services output grew by 0.4% in August 2023, after a fall of 0.6% in July 2023, and was the main contributor to the growth in GDP in July. Output in consumer facing services fell by 0.6% in August 2023 following a fall of 0.2% in July. Production output fell by 0.7% in August 2023, following a fall of 1.1% in July 2023. The construction sector declined by 0.5% in August 2023, following a 0.4% decrease in July 2023.
Brexit has undeniably contributed to a worsening financial situation in Great Britain, causing economic disruption, increased costs, and uncertainty for businesses and consumers alike. One of the most immediate consequences of Brexit was economic disruption. The UK was no longer part of the EU's single market and customs union, which meant new trade barriers and customs checks were introduced. This change led to increased paperwork, delays at ports, and disruptions in the supply chain. The sudden implementation of customs checks and additional regulations had a profound impact on British businesses, especially those that relied heavily on seamless trade with the EU.
Many companies found themselves grappling with new red tape, extra costs, and the need to adapt to a new regulatory environment. This disruption has been particularly challenging for industries such as manufacturing, agriculture, and fishing, which had deep ties to the EU market. Another significant issue stemming from Brexit is the rising costs. A weaker British pound, influenced by uncertainty and the financial consequences of Brexit, made imports more expensive. This, in turn, has led to inflationary pressures on consumer goods
For example, the price of many food items, especially fresh produce and meat, has seen an increase due to new customs checks and tariffs. Likewise, some businesses have had to deal with escalating costs related to customs duties and increased shipping charges. The financial burden of these rising costs has been felt by both consumers and businesses, putting pressure on household budgets and eroding profit margins for companies. Brexit brought about an era of uncertainty that still lingers today. Businesses were left questioning the future trading relationship between the UK and the EU, which led to hesitancy in investment decisions. The financial sector, which was once a dominant contributor to the UK's economy, was also hit hard. Major banks and financial institutions began relocating some of their operations to EU member states to maintain access to the single market, leading to a loss of jobs and economic activity in the UK. Another concern that has emerged post-Brexit is the loss of talent. The free movement of labour between the UK and the EU has come to an end.
As a result, many industries, including healthcare, education, and technology, are grappling with labor shortages. The country's previously vibrant arts and culture sector is also facing challenges in attracting international talent due to visa restrictions and immigration changes. While Brexit supporters argued that leaving the EU would provide the UK with more economic independence and control, the reality has been a different story. The challenges remain, and it is essential for policymakers to find innovative solutions to mitigate the adverse effects of Brexit
(The writer is a veteran journalist based in London; views are personal)
