Economy February 12, 2026

How much could closer UK-EU ties add to the economy?

Category
Economy

Figures out today show the UK economy expanded by only 0.1% in the final three months of last year.

Analysis from the Office for National Statistics (ONS) shows that the economy grew at the same rate of 0.1% as the previous three months. 

It comes the day after Chancellor Rachel Reeves said she would push for closer integration with the EU to reduce the trade barriers put up by Brexit.

So how much could closer trade ties with the EU help the UK's flatlining economy?

Research last year showed that deep alignment in both goods and services could grow GDP by 1.7% to 2.2%. Alignment on goods alone could boost GDP by 1% to 1.5%.

Brexit is on course to cut UK trade intensity by 15%, the Government’s independent financial watchdog has warned. 

Leading estimates also suggest that by 2025, Brexit had reduced UK GDP by 6% to 8%, with the impact accumulating gradually over time. 

"We estimate that investment was reduced by between 12% and 18%, employment by 3% to 4% and productivity by 3% to 4%" (National Bureau of Economic Research).

Dr Mike Galsworthy, Chair of European Movement UK, said:

"This decade has seen the UK economy on life-support, with some of the worst growth in a century. There is an obvious treatment right on our doorstep, but the government refuses to administer it.

"Every month we delay discussing a customs union or single market access with the EU, or dynamic alignment or a proper sanitary and phytosanitary (SPS) agreement, more contracts move to Rotterdam or Düsseldorf and never come back.

"The UK-EU reset cannot just be a summit photo, it must mean market access. The UK's economic woes are the true cost of a bad deal. It is time to stop managing decline and start rebuilding a trading relationship that actually works for British industry."

 


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