London Daily

Focus on the big picture.
Thursday, Nov 06, 2025

Brexit hit UK investment by £29bn, says Bank of England policymaker

Brexit hit UK investment by £29bn, says Bank of England policymaker

Brexit has dealt the UK economy a "productivity penalty" of £29bn, or £1,000 per household, a Bank of England policymaker has said.

Jonathan Haskel, an external member of the Bank's monetary policy committee, said a wave of investment "stopped in its tracks" in 2016 following the vote.

He said the UK had "suffered much more" of a productivity slowdown than other large economies because of Brexit.

The Treasury said it did not recognise Mr Haskel's figures.

The Bank of England declined to comment.

Mr Haskel, who was interviewed by website newsletter The Overshoot, was asked why he thought the UK was an "extreme outlier" when it came to facing a slowdown in productivity.

He said: "Yes, we suffered much more. A bit of that is that we have this larger financial sector. But I think it really goes back to Brexit.

"If you look in the period up to 2016, it's true that we had a bigger slowdown in productivity up to 2016, but we had a lot of investment. We had a big boom between 2012-ish to 2016.

"But then investment just plateaued from 2016, and we dropped to the bottom of G7 countries."

Since the Brexit referendum in 2016, there has been a global pandemic, swiftly followed by an energy crisis, which has made estimating any financial impact directly related to Brexit difficult.


'Productivity penalty'


But investment has stalled since the referendum.

Some economists, including the International Monetary Fund, have suggested that uncertainty surrounding Brexit, including the unsettled issue of the Northern Ireland Protocol, has deterred at least some spending.

Mr Haskel said that the Brexit referendum had an impact on economic growth as a result of the reduction in trade, with the UK opting to leave the EU and its single market and secure trade deals elsewhere.

He referred to a calculation to show what the UK economy could have looked like if investment had carried on growing at the rate it had been before the referendum, compared to what it is currently growing at.

Mr Haskel described the hit to the economy as the "productivity penalty", which amounted to about 1.3% of gross domestic product (GDP). GDP is an important tool for looking at how well, or badly, an economy is doing.

"That 1.3% of GDP is about £29bn, or roughly £1,000 per household," he added.

Sir Richard Branson is among the business bosses who have suggested the cost of Brexit red tape would put them off investing in the UK.

The pro-Brexit group Briefings for Business claims there is no evidence of a Brexit-related hit to investment.

A Treasury spokeswoman added that since leaving the EU single market, the UK had grown faster than France and Germany.

"The government is making the most of our Brexit freedoms to grow the economy, including ambitious financial services sector reforms which will unlock over £100bn of investment, and we are reviewing EU-derived rules in other critical growth sectors this year," she said.


Recession warning


Figures released last week showed that the UK narrowly avoided falling into recession in 2022, but the Bank expects it to enter one this year.

A recession is typically defined as when the economy shrinks for two consecutive three-month periods. It means the economy is generally performing badly and companies may make less money and cut jobs, leaving the government with less tax revenue.

The Bank of England is the UK's central bank and has a major influence on managing the country's economy. It is responsible for setting interest rates, which are at a 14-year high in an attempt to reduce inflation - the rate at which prices rise.

Mr Haskel, who has consistently voted in favour of hiking interest rates, also told The Overshoot that inactivity in the labour market was a distinctly "British thing".

"Inactivity behaviour here looks very different to other countries: we've had a rise while other countries have had a fall," he said.

Nearly nine million people in the UK are currently "economically inactive", which is where people are not actively looking for work.

The government has been considering plans to coax retired middle-aged workers back into jobs in an attempt to boost the economy.

Newsletter

Related Articles

0:00
0:00
Close
UK Pre-Budget Blues and Rate-Cut Concerns Pile Pressure on Pound
ITV Warns of Nine-Per-Cent Drop in Q4 Advertising Revenue Amid Budget Uncertainty
National Grid Posts Slightly Stronger-Than-Expected Half-Year Profit as Regulatory Investments Drive Growth
UK Business Lobby Urges Reeves to Break Tax Pledges and Build Fiscal Headroom
UK to Launch Consultation on Stablecoin Regulation on November 10
UK Savers Rush to Withdraw Pension Cash Ahead of Budget Amid Tax-Change Fears
Massive Spoilers Emerge from MAFS UK 2025: Couple Swaps, Dating App Leaks and Reunion Bombshells
Kurdish-led Crime Network Operates UK Mini-Marts to Exploit Migrants and Sell Illicit Goods
UK Income Tax Hike Could Trigger £1 Billion Cut to Scotland’s Budget, Warns Finance Secretary
Tommy Robinson Acquitted of Terror-related Charge After Phone PIN Dispute
Boris Johnson Condemns Western Support for Hamas at Jewish Community Conference
HII Welcomes UK’s Westley Group to Strengthen AUKUS Submarine Supply Chain
Tragedy in Serbia: Coach Mladen Žižović Collapses During Match and Dies at 44
Diplo Says He Dated Katy Perry — and Justin Trudeau
Dick Cheney, Former U.S. Vice President, Dies at 84
Trump Calls Title Removal of Andrew ‘Tragic Situation’ Amid Royal Fallout
UK Bonds Rally as Chancellor Reeves Briefs Markets Ahead of November Budget
UK Report Backs Generational Smoking Ban Ahead of Tobacco & Vapes Bill Review
UK’s Domino’s Pizza Group Reports Modest Like-for-Like Sales Growth in Q3
UK Supplies Additional Storm Shadow Missiles to Ukraine as Trump Alleges Russian Underground Nuclear Tests
High-Profile Broodmare Puca Sells for Five Million Dollars at Fasig-Tipton ‘Night of the Stars’
Wilt Chamberlain’s One-of-a-Kind ‘Searcher 1’ Supercar Heads to Auction
Erling Haaland’s Remarkable Run: 13 Premier League Goals in 10 Matches and Eyes on History
UK Labour Peer Warns of Emerging ‘Constituency for Hating Jews’ in Britain
UK Home Secretary Admits Loss of Border Control, Warns Public Trust at Risk
President Trump Expresses Sympathy for UK Royal Family After Title Stripping of Prince Andrew
Former Prince Andrew to Lose His Last Military Title as King Charles Moves to End His Public Role
King Charles Relocates Andrew to Sandringham Estate and Strips Titles Amid Epstein Fallout
Two Arrested After Mass Stabbing on UK Train Leaves Ten Hospitalised
Glamour UK Says ‘Stay Mad Jo x’ After Really Big Rowling Backlash
Former Prince Prince Andrew Faces Possible U.S. Congressional Appearance Over Jeffrey Epstein Inquiry
UK Faces £20 Billion Productivity Shortfall as Brexit’s Impact Deepens
UK Chancellor Rachel Reeves Eyes New Council-Tax Bands for High-Value Homes
UK Braces for Major Storm with Snow, Heavy Rain and Winds as High as 769 Miles Wide
U.S. Secures Key Southeast Asia Agreements to Reshape Rare Earth Supply Chains
US and China Agree One-Year Trade Truce After Trump-Xi Talks
BYD Profit Falls 33 % as Chinese EV Maker Doubles Down on Overseas Markets
US Philanthropists Shift Hundreds of Millions to UK to Evade Regulatory Uncertainty in Trump Era
Israeli Energy Minister Delays $35 Billion Gas Export Agreement with Egypt
King Charles Strips Prince Andrew of Titles and Royal Residence
Trump–Putin Budapest Summit Cancelled After Moscow Memo Raises Conditions for Ukraine Talks
Amazon Shares Soar 11% as Cloud Business Hits Fastest Growth Since 2022
Credit Markets Flooded with More Than $200 Billion of AI-Linked Debt Issuance
U.S. Treasury Secretary Scott Bessent Says China Made 'a Real Mistake' by Threatening Rare-Earth Exports
Report Claims Nearly Two Billion Dollars in Foreign Charity Funds Flowed into U.S. Advocacy Groups
White House Refutes Reports That US Targeting Military Sites in Venezuela
Meta Seeks Dismissal of Strike 3’s $350 Million Copyright Lawsuit
Apple Exceeds Forecasts With $102.5 Billion Q3 Revenue Despite iPhone Miss
Israel's IDF Major General Yifat Tomer-Yerushalmi Admits to Act Amounting to Aiding Hamas During Wartime (Treason)
Shawbrook IPO Marks London’s Biggest UK Listing in Two Years
×