The slow, grinding economic pain experienced by the United Kingdom after Brexit is being used as a blueprint for what the entire world can expect from the recent wave of protectionism. A major new report warns of a significant delayed impact from US tariffs, contributing to a “dim” global outlook despite current resilience.
The report explicitly cites the UK’s experience, noting that “business investment continued to grow in the period immediately following the UK’s withdrawal from the EU and started to fall steadily only beginning in 20_18_.” It projects a similar lag on a global scale, where the initial shock of tariffs has been absorbed, but the real damage to investment is yet to come.
This has led to a paradoxical forecast: global growth for this year has been upgraded to 3.2% due to this delayed reaction, but the long-term forecast remains deeply pessimistic. The apparent strength is seen as a temporary illusion before the “Brexit blueprint” plays out globally.
The UK itself continues to navigate a difficult path. While its 20_25_ growth has been modestly upgraded to 1.3%, it is also facing a forecast for the highest inflation rate in the G7. This demonstrates the long-term challenges that can persist even years after a major policy shock.
The report also warns of other slow-burning fuses, such as the economic drag from restrictive immigration policies and the potential for a “correction” in “stretched” financial markets. The overarching lesson is that the full consequences of major policy shifts are rarely immediate and often more painful than they first appear.
