What’s next for Britain and the EU?

Slapping a number on the cost of Brexit is tough: there is no easy counterfactual. Worse, Britain formally left the EU in January 2021, while covid-19 lockdowns were still warping economic data. Economists’ best stab uses a “Doppelgänger” model to approximate no-Brexit Britain to a weighted average of countries that performed similarly before 2016. That usually lands on a one-off hit to GDP from Brexit of 5%, which is also near the rough 4% assumption of the Office for Budget Responsibility, Britain’s fiscal watchdog.