Bank of England
London EC2R 8AH
Institutional Affiliation: Bank of England
NBER Working Papers and Publications
|September 2019||The Impact of Brexit on UK Firms|
with Nicholas Bloom, Philip Bunn, Scarlet Chen, Paul Mizen, Gregory Thwaites: w26218
We use a major new survey of UK firms, the Decision Maker Panel, to assess the impact of the June 2016 Brexit referendum. We identify three key results. First, the UK’s decision to leave the EU has generated a large, broad and long-lasting increase in uncertainty. Second, anticipation of Brexit is estimated to have gradually reduced investment by about 11% over the three years following the June 2016 vote. This fall in investment took longer to occur than predicted at the time of the referendum, suggesting that the size and persistence of this uncertainty may have delayed firms’ response to the Brexit vote. Finally, the Brexit process is estimated to have reduced UK productivity by between 2% and 5% over the three years after the referendum. Much of this drop is from negative within-firm e...