Brexit, three years later no catastrophe. The economy holds up with freer hands

London economy and trade positive after Brexit: no disaster

No catastrophe. The Cassandras who considered Brexit an apocalypse have been proven wrong. It emerges from a new report from the ISPI geoeconomics observatory, which recalls that Brexit formally became reality from midnight on 31 January 2020, even if in practical terms some changes occurred starting from 1 January 2021, when the so-called Transition Period which was necessary to continue negotiating the terms of the new economic relationship between the United Kingdom and the European Union.

Here are the data reported by Ispi: “From 2021 (therefore the first year in which the United Kingdom remained outside the European single market) to 2023 the country's GDP grew at an average annual rate of 4.5%, compared to growth average which in the European Union was instead 3.3%”even though in 2020 GDP had collapsed by 10.3% during the first year of Covid, almost double the EU average

Ispi's analysis continues: “Rishi Sunak's executive, who took over from Liz Truss, managed to straighten the rudder, thus avoiding a recession in 2023 (also favored by a global economy that proved to be more robust than expected ) but at the price of a fiscal and monetary tightening which will certainly not favor economic growth in the future”.

Foreign trade is also regenerating, and is actually increasing: “Compared to the pre-Brexit and pre-pandemic period, the United Kingdom has managed to increase its trade flows already in 2022even if at the expense of a notable growth in imports which translated into a significant increase in the trade deficit (which went from 224 billion dollars in 2019 to 288 in 2022)” certifies Ispi. In short, no catastrophe thanks to a series of new trade agreements reached in the Indo-Pacific. Although, obviously, Ispi reminds us that the challenges on the horizon will not be simple: in a globalized context like the current one, increasingly dominated by large economic blocs (above all the USA, China and the EU), the weight of smaller economies such as the British one will necessarily be reduced.”

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