The Brexit vote precipitated the unraveling of the United Kingdom's membership in the world's deepest economic integration agreement. This article reviews evidence on the realized economic effects of Brexit. The 2016 Brexit referendum changed expectations about future UK-EU relations. Studying its consequences provides new insights regarding the economic impacts of news and uncertainty shocks. Voting for Brexit had large negative effects on the UK economy between 2016 and 2019, leading to higher import and consumer prices, lower investment, and slower real wage and GDP growth. However, at the aggregate level, there was little or no trade diversion away from the European Union, implying that many of the anticipated long-run effects of Brexit did not materialize before the new UK-EU trade relationship came into force in 2021.

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1 August 2022

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Annual Review of Economics 14, pp.495-519, 2022

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DOI: 10.1146/annurev-economics-051420-104231

https://www.annualreviews.org/doi/abs/10.1146/annurev-economics-051420-104231

This Journal article is published under the centre's Trade programme.

This publication comes under the following theme: Brexit