Ever since the Brexit referendum in June 2016—when the United Kingdom voted to leave the European Union—British-EU relations have been bitterly fraught. The reigning theory among pro-Brexit Conservatives in London was that EU officials had behaved like wronged ex-lovers: they begrudgingly accepted the end of the affair but were now determined to make the United Kingdom pay for its decision to leave. EU officials, for their part, were tired of British antics; anytime they agreed anything behind closed doors with the United Kingdom about how their relationship would work, those agreements would be leaked or not fulfilled. Moreover, the EU loathed the fact that the British government never openly talked about the tradeoffs inherent in leaving the EU—greater sovereignty came at a considerable economic cost—while the United Kingdom felt vindicated in its long-held belief that the EU had a problem with democracy; Brussels seemed bent on making it hard for London to abide by the wishes of the British electorate.
For better or worse, the United Kingdom finally left the European Union’s single market and customs union in January 2021 after years of acrimonious negotiations and political theater. And although the full effects in the United Kingdom of the divorce were initially obscured by the impact of the COVID-19 pandemic, the real price of Brexit started to become clear by the end of 2022. The reintroduction of nontariff trade barriers, such as customs inspections and procedures, increased the costs of doing business with Europe. As a result, British growth lagged all other G-7 countries, and investment has yet to recover to the levels it enjoyed before the Brexit referendum.
