Brexit has reduced Britain’s competitivenes and will lower productivity and leave the average worker less well-off than if the UK had remained in the European Union (EU), a new study said.
Leaving the EU has also reduced the openness of Britain’s economy, exacerbated the cost-of-living crisis and led to declining business investment, The Resolution Foundation said.
The downturn in economic activity across various areas was attributed to a "depreciation-driven inflation spike" in the wake of Brexit.
Labour productivity will fall 1.3% by the end of the decade following trading rule changes – sparking even lower wage growth – with real pay to decrease by £470 per worker per year on Brexit alone.
Britain has seen an 8% reduction in trade as a proportion of economic output since 2019, giving up market share across America, Canada and Japan – three of its biggest non-European import markets last year.
"Brexit represents the biggest change to Britain's economic relationship with the rest of the world in half a century,” Sophie Hale, Resolution Foundation principal economist, commented.
Post-Brexit trade rules, which were effective from January last year, did not though lead to as high as an expected decline in British exports as first thought.