The Cost of Brexit: Is the UK Ready to Rejoin the EU?

The United Kingdom’s economy has shrunk by 4% to 8% of its GDP since leaving the European Union, according to the National Bureau of Economic Research (NBER), which estimates an annual cost of £180 billion. Current trends indicate a growing appetite for a “Swiss-style” economic reintegration with Brussels.

Why is the UK economy struggling post-Brexit?

The National Bureau of Economic Research (NBER) calculates that Brexit costs the UK approximately £180 billion (roughly €205 billion) every year. This economic drag has resulted in a total GDP loss ranging from 4% to 8%.

Beyond the balance sheets, the EU itself contracted. When the UK departed, the bloc dropped from 28 to 27 member states, losing 66 million citizens, which represented 13% of the EU’s total population.

Did you know? The UK has cycled through six prime ministers since the 2016 referendum: James Cameron, Theresa May, Boris Johnson, Liz Truss, Rishi Sunak, and Keir Starmer.

Do Brexit voters regret the decision?

Public sentiment has shifted significantly. A poll by the European Council on Foreign Relations (ECFR), cited by the think tank Riparte l’Italia, shows that 66% of respondents link the rising cost of living to Brexit, while 65% point to negative impacts on the overall economy.

The data reveals a specific contradiction regarding immigration. While illegal immigration was a cornerstone of the “Leave” campaign, 56% of all respondents and 58% of those who originally voted for Brexit believe the move actually worsened the issue.

When asked about the primary advantages of leaving the EU, the most frequent response among those polled was “I don’t know.”

What is the “Swiss Model” and could it work for Britain?

Domhnall O’Sullivan of Swissinfo suggests the “Swiss model” is regaining traction as a viable path forward. Switzerland remains outside the EU but maintains deep trade and interaction agreements that provide economic benefits without full membership.

O’Sullivan notes that this approach, once discussed by right-wing figures like Nigel Farage, is now being proposed by left-wing strategists and the Financial Times. The goal is to maximize economic integration while minimizing the loss of national sovereignty.

However, this path faces internal resistance. The government must balance pressure from unions wanting closer EU ties against the Reform Party and “Brexiteers” who view any reintegration as a betrayal of the referendum.

How does “Manchesterism” change the economic approach?

Giuseppe Telesca of the University of Glasgow identifies a shift toward “Manchesterism,” a political course associated with Andy Burnham. This model promotes a “Productive State” where the government exerts public control over essential sectors.

This Is What Brexit Cost the World

Telesca explains that this approach targets services that private capital has failed to manage efficiently, specifically:

Public transport
Social housing
Energy grids
Water services

This strategy contrasts with the strict macroeconomic stability maintained by Chancellor Rachel Reeves. Telesca argues that while Reeves’ focus on balanced books is prudent, it has not yet sparked the necessary transformation of the British economy.

Pro Tip: To track the actual impact of these policies, monitor the UK’s quarterly GDP growth rates compared to the G7 average, as this reveals whether “Productive State” interventions are offsetting Brexit losses.

What role does US politics play in the UK-EU relationship?

The return of Donald Trump to the US presidency has accelerated the need for a UK-EU rapprochement. Giulia Caravale of Sapienza University of Rome notes that while Keir Starmer initially kept Brexit on the sidelines of his 2024 campaign to avoid division, external pressures are mounting.

Caravale argues that negative economic data and the shifting geopolitical landscape under the Trump administration are pushing the UK and EU toward a shared democratic value model. While Starmer has avoided pledging a return to the Single Market or Customs Union, the necessity of cooperation is increasing.

Mario Angiolillo, director of the Osservatorio Eu-Uk-Usa, adds that the timeline for this reunion will depend on global competition for rare earth minerals, energy security, and technological supremacy. He suggests that upcoming elections in key EU countries will ultimately dictate the terms of the rapprochement.

Frequently Asked Questions

How much GDP has the UK lost due to Brexit?

According to the National Bureau of Economic Research (NBER), the UK has lost between 4% and 8% of its GDP.

What is the “Swiss Model” for the UK?

It is a proposed arrangement where the UK would remain outside the EU but sign bilateral agreements to ensure economic integration and trade, similar to how Switzerland operates.

Do “Leave” voters still support Brexit?

According to ECFR polling, a significant portion of “Leave” voters have changed their minds, with 58% believing that illegal immigration—a key campaign issue—has actually worsened.

What is the “Productive State” model?

Proposed under “Manchesterism,” it involves the state taking public control of sectors like energy, transport, and water to ensure equity and efficiency where private markets have failed.

What do you think? Should the UK adopt the Swiss model to recover its economic losses, or is full EU membership the only real solution? Let us know in the comments or subscribe to our newsletter for more geopolitical analysis.