Ten years after the 2016 referendum, a majority of British voters now favor rejoining the European Union as the long-term economic toll of Brexit becomes clear. According to Bloomberg Economics, the UK economy has suffered a 2% to 4% decline in GDP due to the exit, with a projected 2.5% long-term loss equaling £30 billion in annual tax revenue—a sum equivalent to the entire Ministry of Defence capital budget.
Why the UK is rethinking its post-Brexit economic strategy
The economic reality of leaving its largest trading partner has forced a shift in political priorities. Data from Bloomberg Economics indicates that while previous estimates of the damage varied, the current consensus points to a persistent drag on growth. This shortfall in tax revenue is fueling debate in Westminster about how to repair trade relations without triggering a new wave of domestic instability.
A recent Ipsos poll published by Bloomberg found that 52% of British adults now support rejoining the EU, while only 33% believe the UK should remain outside the bloc.
What are the primary scenarios for closer EU ties?
Reversing the economic damage remains difficult, as no option short of full re-entry recovers more than half of the lost trade output. Bloomberg Economics outlines three main paths, all of which require significant concessions:
- Single Market for Goods: This provides the largest potential economic boost but has been rejected by European officials.
- Swiss-style Agreements: A package of interconnected trade deals that would require the UK to adopt EU regulations without having a vote on them.
- Customs Union: A commitment to duty-free trade that limits the UK’s ability to strike independent global trade deals.
Each of these paths would require the UK to accept regulatory alignment, a process some officials have compared to the controversial “Henry VIII powers” used by the Boris Johnson administration to push through the original withdrawal.
How political “red lines” complicate the path forward
Prime Minister Keir Starmer faces a structural dilemma: the public wants better economic ties, but they remain opposed to the return of free movement. Starmer has explicitly ruled out rejoining the Single Market or the Customs Union, citing the 2016 mandate to end the automatic movement of people between the UK and EU.
This “red line” is becoming harder to maintain as the Labour Party faces pressure from both sides. Within the party, figures like Andy Burnham and Wes Streeting are signaling a potential willingness to revisit the terms of the exit. Meanwhile, Nigel Farage’s Reform UK party—which leads in several polls—continues to campaign on a hard-Brexit platform, complicating any attempt at a softer, more integrated relationship with Brussels.
The security shift: Why Europe is more open to compromise
Geopolitical instability is changing the calculus in Brussels. The Russian invasion of Ukraine and uncertainty regarding future US support under Donald Trump have made European leaders more receptive to a closer security and trade partnership with London.
While France remains cautious, fearing that concessions to the UK could destabilize the EU ahead of potential domestic political shifts, countries in Scandinavia and Eastern Europe are increasingly pushing for a unified front. This security-first approach is creating a narrow window for the UK to negotiate, provided they can resolve the internal political friction regarding immigration and sovereignty.
Frequently Asked Questions
How much has Brexit cost the UK economy?
According to Bloomberg Economics, the long-term impact is estimated at a 2.5% loss of GDP, resulting in roughly £30 billion of lost annual tax revenue.
What is “dynamic alignment”?
It is a process where the UK adopts EU regulations automatically to ease trade friction. It would effectively allow the UK to follow Brussels’ rules without having a seat at the table to vote on them.
Will there be a second referendum?
While an Ipsos poll shows nearly half of respondents support a new vote, neither the major political parties nor the current government have committed to holding one.
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