A decade on from the referendum that shook the Westminster establishment to its core, the balance sheet on Brexit is beginning to look more respectable than the Remainer consensus ever dared admit. For years the Treasury orthodoxy, the IMF and every self-respecting City economist warned of calamity. Yet here we are. GDP is not in the gutter. London has not become a backwater. And crucially, the United Kingdom has regained something money cannot easily buy: regulatory autonomy and the ability to diverge from European sclerosis.
Let us start with the numbers that matter to the man on the street. Inflation, after the post-pandemic spike and energy shock, is now converging on target. The Office for Budget Responsibility may have shaved a few percentage points off long-run potential output, but that model assumed no compensating efficiency gains from deregulation. And what has actually happened? The UK has negotiated over 70 trade deals, including with Australia and New Zealand. Trade volumes with the EU have stabilised, while services exports to the rest of the world have grown briskly. The current account deficit, that perennial worry, has narrowed. Capital flight? Hardly. The City remains the world's second financial centre, and the government's Edinburgh reforms are steadily liberalising insurance and asset management.
Critics will point to the depreciation of sterling since 2016. A weaker pound is indeed a tax on imports, but it has also boosted export competitiveness and repatriated corporate profits. The stock market, as measured by the FTSE 100, has generated total returns broadly in line with European peers. And the gilt market? Despite the disastrous Truss mini-budget episode, long-term yields remain well anchored relative to Italy or Spain. The Bank of England, for all its mistakes, has maintained credibility on inflation forecasting better than the ECB.
Yet the real dividend has been political and legal. The UK has finally escaped the jurisdiction of the European Court of Justice. It can now pursue its own agricultural policy, its own state aid rules, and its own approach to financial services regulation. The Financial Services and Markets Act 2023 gives the Bank of England and the FCA a secondary objective to promote international competitiveness. That is a direct reversal of the Brussels preference for stability over dynamism. Already we see the effects: the UK has approved gene-edited crops, simplified rules for biotech, and is designing a digital securities sandbox that the EU can only envy.
Of course, none of this has been costless. Business investment has been subdued, partly due to uncertainty over the final shape of the trading relationship. The new customs checks on agricultural imports are a bureaucratic drag. And the labour market has tightened, partly because of reduced net migration from the EU. But here too the sovereignty dividend is visible: the points-based system now allows the UK to attract high-skilled talent from India, Nigeria, and the Philippines, filling gaps that European workers could not.
The fiscal picture is more complicated. The OBR forecasts that GDP will be 4% lower in the long run than if Remain had won. But that counterfactual is entirely hypothetical. It assumes the EU would have reformed, that the Eurozone would not have faced another crisis, and that the UK would have avoided the worst of the 2020 pandemic disproportionately affecting continental supply chains. More importantly, the Treasury has saved around £10 billion a year in net contributions to the EU budget. That money, while not entirely redirected to domestic priorities, has allowed some tax cuts and increased spending on science and infrastructure.
What the markets really fear is not Brexit itself, but the political instability that might follow. The revolving door of Prime Ministers post-2016 did real damage to the UK's reputation for fiscal competence. But the current government, under Sunak, has steadied the ship. The Office for Budget Responsibility now publishes twice-yearly fiscal forecasts that markets take seriously. The Bank of England's quantitative tightening programme is proceeding without a hitch. The pound has rallied against the euro and the dollar in recent months.
So, where does that leave the Brexit ledger? After a decade, the tangible gains are modest but real: regulatory independence, trade deal flexibility, and a more competitive services sector. The costs have been front-loaded, with the pain of depreciation and investment uncertainty. But as the world fragments into competing blocs, the ability to make one's own laws is no small asset. The referendum decision was never about economics alone. It was about sovereignty. And on that measure, the UK is demonstrably better off.
Ten years on, the bottom line is clear: Britain has not fallen off a cliff. It has taken a different path, with all the risks and rewards that entails. For investors, the message is to ignore the political noise and focus on the fundamentals. The UK remains a large, liquid, and rule-of-law economy. Brexit is now part of the landscape, and markets have priced it in. The question now is whether policymakers can build on the foundation or squander it with further self-inflicted wounds.
