Brexit formally took effect two years ago this week, but the economic and political consequences are still unfolding. It is clear that the UK has manoeuvred itself economically into a difficult situation by leaving the single market. Now, in addition, recent numbers show dramatic consequences for a country that is struggling to recover from the pandemic. In October 2021 trade in the eurozone exceeded pre-Covid December 2019 levels by 4%, whereas the UK stagnated at a much lower level.
UK trade had shown signs of a strong recovery from the coronavirus shock by the end of 2020, but this fell back significantly in 2021. Research undertaken by the IFO (Institute for Economic Research) in Munich suggests that further negative effects have materialised as the British economy adjusts to an array of non-tariff barriers ushered in when the Brexit transition period ended on 1 January 2021.
