Brexit Cost UK Economy 6%: Company Register Data Shows Sectoral Impact

The UK economy has suffered a 6% reduction in output since the Brexit referendum, according to economists' analysis of internal Bank of England data covering thousands of British companies over the past decade^[1]. The study, co-authored by Stanford University professor Nick Bloom and Bank of England economists, examined company-level data used for interest rate decisions to reconstruct how the UK would have grown without the EU exit.

CompanyPulse's database of 5.6 million UK companies^[2] provides a complementary view of how this economic cost manifested across different sectors and company types since the June 2016 referendum.

Two Phases of Economic Impact

The Bank of England analysis^[1] identified two distinct phases of Brexit's economic impact. Approximately half the 6% cost came from uncertainty during the post-referendum period before the UK's formal departure. The remainder resulted from rising trade barriers after the UK left the customs union and single market in 2021.

Professor Bloom noted that the UK was growing rapidly before Brexit and argued the country could have at least partially kept pace with US growth without the disruption. The study concludes: "In the case of Brexit, there was a substantial economic impact on the United Kingdom, but it arose gradually over the subsequent decade."^[1]

Sectoral Distribution in Company Register Data

Analysis of CompanyPulse's company register reveals significant variation in how different sectors weathered the Brexit period. Among the most common company activities, real estate and property-related businesses dominate the register, with 443,418 companies engaged in letting and operating own or leased real estate, and 273,759 in buying and selling of own real estate^[2].

Management consultancy ranks third with 272,866 companies, followed by business support services at 224,312 companies. Retail sale via mail order or internet accounts for 201,311 companies, while information technology consultancy represents 166,486 companies in the register^[2].

Transport and logistics shows 73,591 companies engaged in freight transport by road. The hospitality sector includes 83,000 take-away food shops and mobile food stands. Construction-related activities comprise 99,489 domestic building companies and 115,870 development of building projects companies^[2].

Bank of England Officials on Brexit Effects

Bank of England governor Andrew Bailey has become increasingly direct in recent months about Brexit's economic consequences. He told journalists: "I think the level of activity and growth in the economy has been lower. And the reason for that is that if you reduce the size of the markets that we trade with, so we reduce our export markets, then that does tend to have a negative impact on growth."^[1]

Bailey noted that productivity and market size were also affected, though he said the impact on financial services was "not good" but "nowhere near as detrimental as many people predicted at the time"^[1].

Current Incorporation Activity

Recent incorporation data from CompanyPulse shows continued volatility in company formation rates. In the week ending 19 June 2026, 15,524 new companies were incorporated across the UK^[2]. Daily rates vary significantly, with 5,851 companies incorporated on 18 June 2026 and 5,468 on 17 June 2026, compared to lower weekend activity^[2].

The current active company population stands at 5,585,144 companies from a total register of 6,140,757^[2], indicating a substantial proportion of dissolved or inactive entities accumulated over time.

Methodology and Criticism

The Bank of England study used company-level data alongside five traditional analysis methods. While the company data pointed to a 6% economic hit over 10 years, the wider studies suggested an average impact of 8%^[1]. The latest version was published just ahead of the 10-year anniversary of the referendum.

Critics argue the study does not fully account for the outperformance of US investment and tech industries or the European energy shock that occurred four years ago. Some policy economists contend it is difficult to model counterfactual UK growth without Brexit, and that such studies may overstate Brexit's impact during a period of multiple global crises^[1].

Long-Term Corporate Landscape Changes

The company register data shows a corporate landscape shaped by sustained structural shifts. Dormant companies account for 115,718 entries^[2], while holding companies number 111,349, suggesting significant corporate restructuring activity over the period.

Professional services sectors - including the 82,366 companies in other professional, scientific and technical activities, and 103,083 in other human health activities - represent substantial portions of the active company base^[2]. Software development companies total 100,534, with a further 92,818 engaged in other information technology service activities.

The data suggests the UK's corporate structure has continued to shift toward service-based, digital, and property-related activities during the post-Brexit period, though isolating Brexit's specific role from broader technological and economic trends remains analytically challenging.