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The Devastating Economic Impacts of Brexit

Last updated on October 1, 2025

Ever since the Enlightenment in the 18th century, Europe has developed with one idea in mind: collaboration leads to progress. 

From the sharing of technological ideas during the Industrial Revolution, to the cooperation of European countries through the Post-WWII Marshall Plan, to the creation of the Single-Market European Union in 1993, opening the continent’s markets to the free flow of ideas, goods and people has been crucial to the continent’s success. 

The European Union is the epitome of Europe’s cooperative spirit. The EU’s success is due to the coordination of European countries in order to aid the livelihoods of ordinary people. That’s why the real income of the poorest nations in the bloc have all more than doubled since its creation.

Britain has gone against the promise of the EU, choosing to leave the alliance because of selfish concerns over vague ideas like “sovereignty.” The result of Brexit has been nothing short of economic catastrophe. 

Indeed, look to small businesses. For a sector that contributes to 60 percent of the UK’s employment, the small business market is critical to Britain’s economy. Crucially though, many businesses nearly entirely rely on exporting goods and services to the rest of the EU.

That used to be a relatively painless process—until Brexit threw a wrench in the plan. Since the UK is no longer part of the same market as the EU, exporting to the rest of Europe is a nearly insurmountable challenge. 

From bureaucratic red tape, to duplicitous regulations, to tariffs, small businesses now have to deal with a smorgasbord of hurdles that were nonexistent pre-Brexit. Nearly two-thirds of small businesses say it is more difficult to do business with the EU today than before Brexit. 

And it goes the other way, too. Dutch flower growers importing into Britain now must provide health certificates for flowers deemed quote “high risk.” It now takes 59 steps to import a petunia into the UK. And for French cheesemakers or Irish food companies embedded in British markets, Brexit delivered a shock to the system.

So when barriers are erected, trade goes down and prices go up. UK exports to the EU dropped 27 percent after Brexit, and imports 32 percent. Accordingly, prices went up 20 percent for the average UK consumer during that same time. 

It wasn’t only businesses that were hit though. Before Brexit, the UK’s labor market was strong. Any time there weren’t enough workers domestically, laborers from the EU would fill the gap, ensuring that production could continue. 

Unfortunately, by ending free movement into Britain, Brexit’s restrictive immigration policies sharply reduced the number of people who could work in the UK. From construction workers, to healthcare specialists, to truck drivers, there simply aren’t enough workers to go around. Overall, since Brexit, the UK is down over 300 thousand workers. 

Perhaps the hardest-hit sector is agriculture. In 2022, 40 percent of farmers reported crop losses due to labor shortages, with 56 percent reporting a fall in production. This leads to higher prices for consumers, all while food rots—a whopping 60 million euros of food went unharvested in one year alone.

Ultimately, a country is only as strong as the alliances it creates with others. And when the UK has closed its borders, raising costs for small businesses and creating market-wide shortages, everyone pays the price.

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