10 Years of Brexit: What's the Cost and What's Next?

Bloomberg Economics analysis shows Brexit caused a 2-4% GDP hit. Rejoining the EU could halve that damage but would require politically difficult concessions like accepting freedom of movement. Political constraints and lengthy negotiations make near-term progress unlikely.

Yields sideways , medium term, gpt inferred

inferred

NDX sideways , medium term, gpt inferred

inferred

RUT sideways

Oil sideways , medium term, gpt inferred

inferred

Metals sideways , medium term, gpt inferred

inferred

USD sideways , medium term, gpt inferred

inferred

Bloomberg 5.5
Financial Media
Dan Hanson 9.0

10 Years of Brexit: What's the Cost and What's Next?

dxy

US mentioned as proxy in model but no direct FX implications discussed. UK-specific story has limited USD impact.

metals

No mention of metals markets. No clear directional signal from the discussion.

ndx

No direct mention of US tech or Nasdaq. UK-specific Brexit analysis has limited direct implications for NDX.

rut

No mention of Russell 2000 or US small caps. UK-focused analysis does not provide signals for RUT.

wti

No mention of oil markets. UK economic weakness from Brexit could slightly dampen demand but effect is marginal.

yields

Weak UK growth from Brexit (2-4% GDP hit) and political uncertainty around EU re-engagement suggest no strong directional pressure on UK yields in the medium term.

Brexit analysis shows a 2-4% GDP hit, but isolating Brexit from COVID and other shocks is methodologically challenging.

Speaker1
Speaker2

The model builds a counterfactual UK without Brexit using other countries as proxies. US and Ireland were initially included but caused implausibly large 10% GDP hit, so adjustments were made.

US had massive fiscal stimulus and no energy shock, Ireland has very volatile GDP figures - these cannot be attributed to Brexit, so they were adjusted out to reach the 2-4% range.
Rejoining the EU is now part of political discussion in the Labour Party; question is how much of the GDP hit could be recovered.

Speaker4
Speaker2

Closer EU ties could halve the economic damage, but would require a Swiss-style deal including accepting freedom of movement - a political red line for the UK.

Politics clashes with economics on Brexit. Negotiations take a long time, and with an anti-EU party leading polls by 2029, the EU may see little benefit in negotiating with the UK.

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