Brexit and the cost of living : a tale of two phases

Federico di Pace, Giacomo Mangiante, Riccardo Masolo

We employ Synthetic Control Method techniques to estimate the causal effect of Brexit on the consumer price index (CPI) in the United Kingdom. We construct a counterfactual CPI index from a weighted pool of comparable economies and find that the price level of the United Kingdom rose approximately 7 percentage points more than its synthetic counterpart, between 2016Q2 and 2024Q4. This accounts for over a quarter of total inflation during the period. We attribute about 2 percentage points of this increase to the depreciation of the British pound after the Referendum and the remaining 5 percentage points to the change in trading relationships that ensued the 2021 Trade and Cooperation Agreement.

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Year of publication:	December 2025
Authors:	Di Pace, Federico ; Mangiante, Giacomo ; Masolo, Riccardo
Publisher:	London : Birbeck Centre for Applied Macroeconomics
Subject:	Brexit \| Exchange Rate \| Trade Barriers and Consumer Prices \| Großbritannien \| United Kingdom \| Verbraucherpreisindex \| Consumer price index \| EU-Staaten \| EU countries \| Wechselkurs \| Exchange rate \| Wirkungsanalyse \| Impact assessment \| Handelshemmnisse \| Trade barriers \| EU-Mitgliedschaft \| EU membership

Extent:	1 Online-Ressource (circa 20 Seiten) Illustrationen
Series:	BCAM. - London : Birbeck Centre for Applied Macroeconomics, ZDB-ID 3211902-1. - Vol. 25, 03
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper
Language:	English
Other identifiers:	10419/318188.2 [DOI]
Classification:	C32 - Time-Series Models ; E31 - Price Level; Inflation; Deflation ; F13 - Commercial Policy; Protection; Promotion; Trade Negotiations ; G10 - General Financial Markets. General
Source:	ECONIS - Online Catalogue of the ZBW

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