Brexit Turns 10: Impact on UK & Euro Zone ETFs - EUROPE SAYS
On June 23, 2016, the United Kingdom voted 52-48% to leave the European Union, triggering one of the most consequential political and economic shifts in European history. The immediate fallout was dramatic:. . .
On June 23, 2016, the United Kingdom voted 52-48% to leave the European Union, triggering one of the most consequential political and economic shifts in European history. The immediate fallout was dramatic: the pound plunged, the FTSE 100 fell sharply, and prime minister David Cameron resigned after leading the unsuccessful campaign to remain in the EU. After years of political deadlock, including Theresa May’s failed attempts to secure parliamentary approval for a withdrawal agreement, Brexit was formally completed under Prime Minister Boris Johnson in 2020, according to CNBC. Against this backdrop, below we highlight how Brexit impacted the UK economy, stocks and related ETFs. Inside the UK Economic GrowthThe anticipated post-Brexit economic boost has largely failed to materialize. Although the U. K. economy was also hit by the COVID-19 pandemic and Russia’s invasion of Ukraine, Stanford University professor Nicholas Bloom estimates that Brexit reduced U. K. GDP by 6-8% by 2025, as quoted on CNBC. He attributes the drag to prolonged uncertainty, weaker demand, and inefficient allocation of resources during the lengthy Brexit process. However, the momentum of the economic reform is probably shifting slowly toward the right direction. The U. K. economy expanded by 0. 6% in Q1 2026, matching market expectations and marking the strongest growth since Q1 2025, per tradingeconomics. This follows an upwardly revised 0. 2% increase in the previous quarter. EU Remains Britain’s Largest Trading PartnerDespite Brexit, the European Union continues to be the U. K. ’s biggest trading partner. In 2025, the EU accounted for 41% of U. K. exports and 50% of imports. A trade agreement that came into effect on Jan. 1, 2021, preserved tariff-free and quota-free trade between the two sides, helping maintain strong commercial ties, per the same CNBC article. Sterling Remains WeakerAccording to Convera, sterling has traded roughly 10% below its pre-Brexit level against both the euro and the U. S. dollar. Since the referendum, GBP/EUR has averaged €1. 16 versus €1. 27 during the previous decade, with the currency spending nearly all of its trading time below €1. 20, as mentioned in the same CNBC article. Invesco CurrencyShares British Pound Sterling Trust FXB has offered only 0. 7% annualized return over the past five years and 3. 7% annualized gains over the past three years. The weaker currency has made imported goods, energy and raw materials more expensive. However, despite the currency weakness doing the rounds, the annual inflation rate in the UK stood at 2. 8% in May 2026, unchanged from the previous month and below market expectations of 3. 0%. The reading remained at its lowest level since March last year. Tags:annualized returnbrexitEconomyEconomy of EUEconomy of the EUEU economyEuropeEuropean HistoryEuropean UnionNicholas Bloompolitical deadlockPrime Minister Boris Johnsonprime minister David CameronUK ECONOMYUnited Kingdom