LONDON – Five years ago, two distinct groups gathered near Britain’s Houses of Parliament, symbolizing the national divide over a significant political decision. Supporters of the Brexit movement waved Union Jack flags and celebrated, while opponents displayed European Union flags, expressing their disappointment and fear. Exactly at 11 p.m. London time on January 31, 2020, marking midnight in Brussels, the United Kingdom officially severed ties with the EU after nearly half a century—a move that ended the free movement and trade that had existed between Britain and the other 27 EU member states.
For those in favor of Brexit, this change signified a reclamation of sovereignty and control over the nation’s future. Conversely, critics viewed the U.K. as retreating into isolation, diminished on the global stage. As time has progressed, the country continues to grapple with the extensive economic, social, and cultural consequences of that decision. “The impact has been quite profound,” noted Anand Menon, a political scientist who leads the think tank U.K. in a Changing Europe. He emphasized that both the economy and the political landscape have undergone significant transformations, marking the emergence of Brexit as a decisive factor in electoral politics.
The decision to leave the EU split the nation profoundly. Britain, an island nation steeped in historical significance, had always held a complicated relationship with the EU. The referendum of June 2016, which asked citizens whether to remain or leave, was set against a backdrop of deindustrialization, public spending cuts, and increased immigration that fueled arguments for the U.K. to “take back control” over its borders, legislation, and economic policies. The referendum outcome shocked many, resulting in a narrow vote of 52% in favor of leaving to 48% against it. Neither the ruling Conservative government, which advocated remaining in the EU, nor the Brexit campaigners had fully anticipated the intricate details of the split.
In the years following the referendum, the U.K. and the EU engaged in protracted negotiations regarding the terms of their separation. The process caused significant parliamentary gridlock and led to the resignation of Prime Minister Theresa May in 2019. Her successor, Boris Johnson, came into power promising to finalize Brexit, yet executing that goal proved to be a complex task.
Ultimately, the departure occurred without a clear agreement on future economic relations, which posed a significant risk as the EU accounted for roughly 50% of the U.K.’s trade. After nearly a year of contentious negotiations, an agreement was reached on Christmas Eve in 2020. Though a minimal trade deal allowed for tariff-free movement of goods, it introduced new bureaucratic obstacles, increased costs, and delays for businesses engaged in trade.
Lars Andersen, the owner of a London-based company that produces labels, noted, “It has cost us money. We are definitely slower, and it’s more expensive. But we’ve survived.” To facilitate continued trade with the EU, Andersen has had to establish a base in Ireland so all orders heading to EU nations can be forwarded from there. While he believes the hassle is manageable, he noted that some small businesses have either paused EU trade or relocated their manufacturing outside the U.K.
Julianne Ponan, the CEO of an allergen-free food business, shared her struggles following the disruption to her EU exports, highlighting how she has pivoted her focus toward emerging markets in the Middle East and Australia. Despite making progress in these new regions, she lamented that the U.K. has lost critical growth opportunities in Europe due to Brexit, estimating that the lost time has set her business back significantly.
Forecasts from the government’s Office for Budget Responsibility indicate that British exports and imports are likely to remain about 15% lower in the long run than if the U.K. had not departed from the EU, with economic productivity projected to drop by approximately 4%. Advocates of Brexit maintain that the initial economic challenges will be counterbalanced by the opportunities to forge new trade agreements worldwide. Since the departure, the U.K. has successfully signed trade deals with countries, including Canada, Australia, and New Zealand.
Nevertheless, trade expert David Henig pointed out that these new agreements have not been sufficient to counterbalance the decline in trade with the U.K.’s closest neighbors. He observed, “While major companies like Airbus and big pharmaceuticals continue to thrive, mid-sized businesses are facing significant struggles, and there isn’t an influx of new companies looking to establish operations in the U.K.”
The COVID-19 pandemic and geopolitical tensions, such as Russia’s invasion of Ukraine, have further complicated the economic landscape, making it difficult to assess the full impact of Brexit. Interestingly, the anticipated reduction in immigration has not materialized; in fact, the number of visas issued for foreign workers has soared, resulting in higher immigration levels than before Brexit.
With growing protectionist sentiments, particularly in the U.S., Britain finds itself navigating a complex relationship between Europe and its transatlantic ties. Menon remarked, “The global environment today is far less accommodating than it was at the time of the Brexit vote in 2016.”
Current polling indicates that many U.K. citizens are now re-evaluating their stance on Brexit, with the majority viewing it as a mistake. However, thoughts of rejoining the EU remain a distant possibility as the rifts from past arguments are still fresh in the collective memory. Prime Minister Keir Starmer of the Labour Party, who took office in July 2024, has pledged to enhance relations with the EU while clearly stating that he will not advocate for rejoining the customs union or the single market. His focus revolves around easing logistical challenges for professionals and enhancing cooperation on security and law enforcement.
In light of the change in tone from the U.K. leadership, EU officials welcome the prospect of improved relations. Nevertheless, with the rise of populism across Europe, the U.K. is not currently at the forefront of EU priorities. Andersen expressed understanding of the challenges inherent in rekindling relationships, but he remains optimistic about a gradual warming of ties between the U.K. and the EU, anticipating that it will occur quietly and incrementally over time.
