The Brexit bill comes due: ten years, seven prime ministers, and an economy 6% smaller than it should be

TL;DR

The Brexit referendum turns ten today. An NBER study estimates the UK economy is 6-8% smaller than it would have been, with investment down 12-13% and productivity down 3-4%. Seven prime ministers have held office since the vote, and 57% of Britons now say leaving was wrong.

Ten years ago today, 52% of the British electorate voted to leave the European Union. The decade that followed delivered seven prime ministers, a permanently weakened currency, and an economy that a landmark study now estimates is between 6% and 8% smaller than it would have been had the country voted to remain.

On Monday, Keir Starmer became the sixth prime minister to leave office since the referendum, resigning after less than two years amid a Labour leadership challenge from Andy Burnham. No occupant of 10 Downing Street has lasted longer than three years in the post-Brexit era, and one, Liz Truss, lasted 49 days.

The price tag

A working paper published last week by the National Bureau of Economic Research, led by Stanford professor Nicholas Bloom, puts the cumulative cost of Brexit at 6% to 8% of GDP. Investment fell 12% to 13%, employment declined 3% to 4%, and productivity dropped by a similar margin.

Around half the GDP loss was attributable to five years of elevated policy uncertainty between the 2016 vote and the Trade and Cooperation Agreement taking effect in 2021. The remainder came from higher costs imposed by more cumbersome trade restrictions.

The effect has not been a sudden collapse, but a cumulative drag that worsens each year. The authors note that the gap between actual and counterfactual GDP will continue to widen even without new shocks.

Sterling and trade

The pound crashed on the morning of the result and has never recovered. GBP/EUR has averaged €1.16 since the referendum, down from €1.27 in the decade before, with sterling spending 98% of trading days below €1.20.

UK goods exports are roughly 13% to 15% lower than a counterfactual model without Brexit, according to studies from the Centre for European Reform and the London School of Economics. New trade deals with Australia, New Zealand, India, and Japan have not come close to compensating for the loss of frictionless access to the EU single market.

The divergence is visible in London’s capital markets. The domestically oriented FTSE 250 has badly underperformed the multinational FTSE 100 for most of the past decade, a gap that reflects depressed business confidence in UK-facing companies.

Tech firms have been particularly reluctant to list in London, preferring New York or Amsterdam. The trend has accelerated even as the UK tech sector’s combined valuation reached $1 trillion.

A demographic cliff

While Westminster cycled through leaders, Britain’s underlying demography accelerated into a slide that is largely independent of the referendum but compounded by it. The Office for National Statistics projects that 2025 was the last year in which births exceeded deaths in England and Wales.

From 2026 onward, net migration is the only thing keeping the population growing at all. The ONS forecasts 6.4 million births against 6.85 million deaths between 2024 and 2034, a natural shortfall of roughly 450,000 people.

The fiscal consequences are already arriving. The number of Britons of pensionable age is set to grow by 1.8 million over the next decade, while the number of children falls by 1.6 million, squeezing the tax base needed to fund pensions and healthcare.

Public opinion has shifted

A YouGov poll conducted on 9 June 2026 found that 57% of Britons now believe leaving the EU was the wrong decision, against 30% who say it was right. The margin has widened steadily since 2021.

The political landscape the vote created has fractured beyond recognition. Reform UK, the populist party that grew out of the original Brexit movement, topped the latest Westminster voting intention poll at 27%, ahead of both the Conservatives and Labour on 18% each.

What the tech sector reveals

Britain’s technology industry offers a paradox that captures the broader Brexit story. The UK tech sector is valued at £1.2 trillion and ranks first in Europe, with British AI startups raising more than £8.2 billion in venture capital in the first half of 2026.

Yet that headline figure masks a structural problem. Companies that once hired freely from Paris, Berlin, and Warsaw now face an immigration system that adds months and thousands of pounds to each recruitment.

UK startups have had to work harder to maintain their EU connections, navigating barriers to data flows and market access that did not exist before 2021. The London Stock Exchange has suffered most visibly, with the FTSE’s underperformance relative to the S&P 500 and Euro Stoxx widening into a structural gap rather than a cyclical one.

The next decade

Burnham, the presumptive next prime minister, has signalled a closer relationship with Brussels. But rejoining the EU is not on any major party’s platform, and economists project average annual growth of just 1.3% between 2026 and 2030.

The vote may have taken place over a single day, but its bill is still adding up.