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Five Years After Brexit: Is The UK Better Off?

On January 31, 2020, the United Kingdom officially left the European Union, marking the end of nearly five decades of membership that had ensured free movement and trade with 27 other European nations. For Brexit supporters, this was a triumph, with the UK regaining control over its borders, laws, and economy. For its opponents, it represented isolation and a decline in global stature. Five years later, the UK is still grappling with the economic, social, and cultural ramifications of the decision.

Economic Consequences And Adjustments

Political scientist Anand Menon, director of the think tank Britain in a Changing Europe, describes the impact of Brexit as “profound” and believes that it has reshaped the UK’s economy. The years of deindustrialization cuts to public spending, and high immigration had created fertile ground for the argument that the UK needed to “take back control.” Despite the 52%-48% result of the 2016 referendum, the aftermath has been complicated.

After years of disagreements on how to navigate the separation, including the resignation of Prime Minister Theresa May, Boris Johnson promised to “get Brexit done,” leading to an agreement on Christmas Eve 2020. But this political departure has come at a high cost. Brexit has disrupted trade and supply chains, creating new economic barriers with the EU, which accounted for half of the UK’s trade.

In the wake of the pandemic and Russia’s invasion of Ukraine, the economic landscape has become even more unpredictable, making it difficult to isolate the full impact of Brexit from other global events. Nonetheless, there are clear signs that the UK’s economy has faced challenges, especially in trade and labor.

The Immigration Paradox

One of the key promises of Brexit was to reduce immigration, but the reality has been the opposite. Despite the end of free movement from EU countries, immigration to the UK has increased, with the government issuing more work visas to non-EU nationals than before Brexit. The rise of immigration has placed additional strain on the country’s services and housing, contributing to the sense of disillusionment for those who supported the exit as a means to curb migration.

Shifting International Dynamics

The UK’s position on the world stage has also changed since Brexit. The country now finds itself caught between Europe and its so-called “special relationship” with the United States. As populist movements rise globally, including the return of Donald Trump to power in the US, the UK faces a more uncertain future, with the international landscape less forgiving than it was in 2016. According to Menon, “The world is much less forgiving now than it was in 2016.”

Public Sentiment And The Future Of EU Relations

Polls show that public opinion on Brexit has soured over the years, with many now viewing it as a mistake. However, rejoining the EU seems unlikely, as the wounds of separation remain fresh. Prime Minister Keir Starmer, elected in 2024, has expressed a desire to “reboot” relations with the EU but has ruled out rejoining the single market or customs union. Instead, he aims for modest changes, such as facilitating artist touring and recognizing professional qualifications, alongside enhanced cooperation on law enforcement and security.

The EU has responded positively to Starmer’s approach, recognizing the shift in tone from previous UK leadership. However, with rising populism and internal challenges, the EU’s priorities have shifted, and the UK is no longer at the top of the agenda.

Five years after Brexit, the UK’s future remains uncertain. While some of the initial promises of sovereignty have materialized, the economic, social, and political challenges stemming from the decision are far from resolved. The country’s strained relationship with Europe and the changing dynamics on the global stage suggest that the full consequences of Brexit may continue to unfold for years to come.

Bitcoin Surges 23% In A Week As Investor Optimism Returns

Bitcoin was on track for a weekly gain of around 23% on Friday as a series of positive macroeconomic and policy developments boosted investor sentiment.

The cryptocurrency was trading about 6% higher at roughly $77,000, up from around $62,800 at the start of the week. Crypto-related stocks also rallied, with Coinbase and Circle gaining more than 9%, while Strategy rose 7%.

Macro Factors Fuel Rally

Bitcoin’s latest surge began Wednesday after Treasury yields fell sharply following a major intervention by the U.S. Treasury in the bond market. Lower yields eased pressure on risk assets and helped trigger a broader move into cryptocurrencies.

The rally was further amplified by a major short squeeze. Around $2.7 billion in crypto short positions were liquidated, according to CoinGlass.

Max Stuedlein, head of Partnerships at Sygnum APAC, said the move reflected an alignment of macroeconomic and policy catalysts, including the Treasury’s decision to increase buybacks of longer-dated government debt.

Clarity Act Boosts Sentiment

Investor confidence improved further on Thursday as the White House and crypto industry leaders made a final push to advance the Clarity Act in the coming weeks.

The legislation is widely viewed as a potential catalyst for the crypto market, although its chances of passing remain relatively limited.

Despite the rally, bitcoin remains well below its 2026 high of $94,820 reached in January and its all-time high of $126,198, set last October.

Analysts See More Volatility Ahead

Lucy Gazmararian, founder and managing partner at Token Bay Capital, said the crypto market may be approaching the end of its bear cycle.

She expects bitcoin could experience one more decline of around 20% before the market turns, pointing to historical cycles and the recent liquidation of heavily leveraged short positions.

Gazmararian also described bitcoin as a long-term hedge against monetary debasement, while warning that its short-term price remains highly volatile and driven by market cycles.

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