On 23 June 2016, Britons went to the polls to vote on whether to remain in the European Union.
A shocking result appeared overnight: voters voted to leave the bloc by 52% to 48%. The pound jumped. London’s FTSE 100 fell. Then-Prime Minister David Cameron – who had called the referendum and led the campaign for a Remain vote – resigned.
Since then, the UK has sought a deal, as Cameron’s successor, Theresa May, failed to pass the proposal three times before stepping down. Brexit was finally delivered by Prime Minister Boris Johnson in 2020.
The Brexit campaign promised to “roll back control” of immigration, free up more money for the country’s health aid, and make trade deals with the world.
Ten years later, Brexit is still alive and well in Britain. Here’s how the UK’s economic and political situation has progressed since then, in charts:
How Brexit has affected UK growth
The UK economy has largely failed to find a post-Brexit boost after it cut ties with its biggest trading partner.
While shocks such as the coronavirus pandemic in 2020 and Russia’s invasion of Ukraine in 2022 reverberated around the world, Stanford professor Nicholas Bloom estimates that by 2025, Brexit would have reduced UK GDP by 6-8%.
He wrote that the negative impacts “reflect a combination of heightened uncertainty, reduced demand, diverted management time, and increased misallocation of resources from the protracted Brexit process.”
How immigration to the UK changed after Brexit
The Vote Leave campaign promised to take back control of the UK’s immigration policy, but its departure from the bloc has had unintended consequences. The UK now has full immigration with EU countries, but migration from non-EU states is increasing amid labor shortages, an increase in international students, and emergency visa programs extended to countries such as Ukraine.
On the other hand, fewer Europeans immigrate to the UK, and net migration from the bloc is back.
“EU migration worsened again in 2022, as the post-Brexit migration plan significantly reduced the chances of EU citizens moving to the UK,” the Migration Observatory wrote in a May briefing.
“The take-up of work visas among EU citizens has been at its lowest since Brexit.”
Sterling
One of the clearest indicators of the impact of Brexit is the euro, which crashed following the vote and is yet to regain its pre-referendum highs against both the euro and the dollar. The pound is currently trading around 10% below its June 2016 value, according to Convera.
Convera found that GBP/EUR has averaged €1.16 since the referendum, down from €1.27 a decade ago, with 98% of trading capital since the Brexit vote below €1.20.
This has made foreign goods and services more expensive for UK citizens, impacting the cost of living as the country imports food, energy and building materials.
What happened to the FTSE 100 and FTSE 250
Performance differences between the large-cap, international FTSE 100 and the more domestically focused FTSE 250 also paint a muted picture for London’s capital markets.
“Beneath the surface, the UK stock market still bears the scars of a decision that weighed on both business and investor confidence,” Chris Smith, UK investment manager at Jupiter, told CNBC.
“The FTSE 100, with its global income exposure and favorable sector composition, has outperformed the more domestically focused FTSE 250. Sterling weakness, FX-led inflation and higher capital costs have all contributed to a more difficult environment for UK-focused businesses,” he added.
Neither index has matched the eye-popping gains in US equity markets, which have enjoyed a long bull run fueled by technology and AI stocks.
“The UK stock market hasn’t changed much in the last decade,” said Mark Preskett, portfolio manager at Morningstar. “The best FTSE stocks of the last ten years remain our best performing companies.”
“If you compare this to the US market, you can see a changing list of companies and an index that has seen real change.”
How Brexit has changed UK-EU trade
The EU remains the UK’s largest trading partner, accounting for more than €800 billion of imports and exports.
By 2025, the EU will account for 41% of UK exports and 50% of UK sales.
A new trade agreement between the two sides was signed on Jan. 1 2021, which prevents any party from introducing tariffs or quotas.
Prime Ministers
When Cameron resigned the morning after the Brexit vote, he had been prime minister for six years. His predecessor, Gordon Brown, was in charge for three years. Before Brown, Tony Blair was prime minister for ten years.
Since the poll, no prime minister has lasted more than three years – and one lasted just 49 days.
Prime Minister Keir Starmer tried to rebuild the country’s relationship with Europe but resigned on Monday as he faced a leadership challenge from rival Andy Burnham, paving the way for a seventh prime minister in a decade.
– CNBC’s Bryn Bache also contributed to this report.
