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Counting the costs: a quantitative assessment of Brexit’s effect on UK regional economies

Author

Listed:
  • Swati Dhingra
  • Emily Fry
  • Sophie Hale
  • Ningyuan Jia

Abstract

This paper examines the implications of the EU-UK Trade and Cooperation Agreement (TCA) using a dynamic spatial general equilibrium model. Unlike previous studies that primarily projected potential impacts of Brexit based on uncertain scenarios, this analysis introduces new estimates of tariffs and nontariff measures (NTMs) specified by the TCA. The findings show that while the TCA will necessitate substantial adjustments for some sectors, Brexit will not fundamentally alter the overall structure of the UK economy. However, the main impacts will manifest as significant hits to real wages and productivity, exacerbating the long-standing economic challenges faced by the UK.

Suggested Citation

  • Swati Dhingra & Emily Fry & Sophie Hale & Ningyuan Jia, 2026. "Counting the costs: a quantitative assessment of Brexit’s effect on UK regional economies," CEP Discussion Papers dp2187, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp2187
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    References listed on IDEAS

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    1. Danyal Arnold & Shania Bhalotia & Swati Dhingra, 2025. "Deglobalisation in disguise? Brexit barriers and trade in services," CEP Discussion Papers dp2110, Centre for Economic Performance, LSE.
    2. Raymond Fisman & Eric Zitzewitz, 2019. "An Event Long-Short Index: Theory and Applications," American Economic Review: Insights, American Economic Association, vol. 1(3), pages 357-372, December.
    3. International Monetary Fund, 2018. "United Kingdom: Selected Issues," IMF Staff Country Reports 2018/043, International Monetary Fund.
    4. International Monetary Fund, 2018. "United Kingdom: Selected Issues," IMF Staff Country Reports 2018/317, International Monetary Fund.
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