Article by Thomas Sampson.  The full economic impacts of Brexit will not materialise for many years. But 21 months after the UK voted to leave the EU, we can assess how the Brexit vote has begun to affect the British economy. Even though the UK remains in the EU, the vote has already had economic impacts. Economic behaviour depends not only on what is happening now, but what people and businesses expect to happen in the future. The referendum changed expectations about the future of the UK’s economic relations with the EU and the rest of the world. There are two parts to this. First, uncertainty has increased. Even now, it remains unclear what exactly the UK’s relationship with the EU will look like after Brexit and how policymaking in the UK will change. This uncertainty makes businesses less willing to invest in risky new projects leading to lower output growth. Second, Brexit is likely to make the UK less open to trade, investment and immigration with the EU. Even before Brexit happens, this could make the UK a less attractive destination for foreign investment and reduce the incentive for businesses to invest in expanding UK-EU trade.

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