Putting all of the evidence together, then, we can conclude that the broad consensus among economists on Brexit was broadly correct. GDP, trade flows and investment have all been curtailed by barriers to trade with the EU. The EU’s single market does raise trade substantially more than free trade agreements, and the UK’s distance from other markets means that trade deals with non-EU countries cannot make up for the losses. The gains from regulatory autonomy are hard to quantify, and must be set against the trade losses stemming from divergence from EU rules – and the fact that even if the UK remains aligned with EU standards and rules, British products are still subject to bureaucracy at the border unless the EU agrees to reduce checks. The end of free movement has been less costly than predicted, because the government has chosen to remain open to immigration, but the forecast losses were significantly smaller than the impact of barriers to trade in any case. Looking ahead, it is important to remember that the costs of Brexit are likely to be permanent, with the economy continuing to be 4 per cent smaller into the future (if we take the OBR’s assumption). Given the fact that FTAs will not make up for Brexit, and the EU also signs trade deals, that means that future British governments can only significantly offset those losses, or eliminate them, through reintegration with the European economy. Whether they choose to do so is up to British politicians and voters and the member-states of the EU, who will determine what the price of reintegration will be.
