As Prime Minister Keir Starmer prepares to host a pivotal summit on Monday, fresh analysis reveals that the stakes are exceptionally high: a successful Brexit reset could inject a staggering £25 billion annually into Britain’s export economy.

New findings by Frontier Economics indicate that the removal of trade barriers, particularly on goods like food, drink, and electronics, could lead to a 2.2 per cent increase in gross domestic product (GDP) over the long term. This economic windfall would offer the kind of growth Starmer has been eager to deliver in a post-Brexit Britain.

The study highlights that the benefits of a closer trade partnership with the European Union would far surpass the gains from recent bilateral deals signed with India and the United States. Another assessment by the National Institute for Economic and Social Research (NIESR) warns that failing to secure such a deal could have dire consequences: a potential 2.7 per cent decline in UK exports by 2027, translating to an economic hit of nearly £30 billion.

Lord Jim O’Neill, former economic adviser to Gordon Brown, underscored the importance of Monday’s negotiations. “Obviously, the closer and more serious we can get, the better it is for reversing our net trade losses, and importantly, net investment from EU areas,” he said. He added that geopolitical instability, such as the Trump-era tariffs, the war in Ukraine, and the economic slowdown in China, might make EU nations like Germany more receptive to forging stronger trade links with the UK.

“Also, I suspect the EU is going to give more than lip service to cross-border services sector reform now. Given UK net advantages in service sector exports, this is important to us.”
Lord Jim O’Neill

Among the anticipated reforms is mutual recognition of professional qualifications, which would ease the process for UK professionals seeking to work in the EU and vice versa, reducing the need for retraining and administrative hurdles.

EU Remains UK’s Top Trading Partner

NIESR’s interim director, Stephen Millard, argued that the EU remains Britain’s most valuable trading partner.

“In 2024, we exported roughly £6.5 billion to India, roughly £53.5 billion to the United States, and roughly £159 billion to the European Union. It is fairly clear from those numbers that a trade deal with the European Union is much more likely to shift the dial than the deals with India and the United States.”
Stephen Millard

Chris Southworth, director general of the UK’s International Chambers of Commerce, reinforced this view. He labelled the Trump-era deal, which reduced tariffs on British car and steel exports, as a “damage limitation agreement” that barely scratched the surface of the UK’s potential, representing just 13 per cent of global GDP.

Southworth expressed concern that the upcoming agreement “may not be ambitious enough,” particularly if it emphasizes goods while neglecting high-growth sectors like digital services.

Labour MP Dame Emily Thornberry, chair of the Commons Foreign Affairs Committee, urged the prime minister to take bolder steps.

“We should be going further than the government currently seems to have the ambition for doing.”
Dame Emily Thornberry

The comprehensive deal expected to emerge from the summit may also feature strengthened defence ties, improvements in trade for both goods and services, and a youth mobility agreement. This latter initiative would allow people aged 18 to 30 to live and work across the UK and EU for limited periods, echoing the freedom of movement once afforded under EU membership.

Two notable additions being considered include UK access to the EU’s €150 billion defence procurement fund—opening up opportunities for British firms to compete for military contracts — and an invitation to join the EU data hub. The data initiative, currently spearheaded by Poland during its EU presidency, could prove essential for Britain’s digital future.

With both the political and economic stakes high, observers across the spectrum are watching closely to see whether Starmer’s Brexit reset can deliver on its transformative promise.