Levelling up by levelling down: The economic and political costs of Brexit

Eleonora Alabrese, Jacob Edenhofer, Thiemo Fetzer and Shizhuo Wang

No 2026-06, Discussion Papers from Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)

Abstract: The study uses a synthetic control method to estimate the local economic cost of Brexit. The vast majority of regions in the UK have lost as a result of Brexit. Since losses tend to be concentrated in relatively prosperous regions, Brexit has reduced regional inequalities (“levelling up“) while pushing down national output (“levelling down“ in the aggregate). Using both aggregate data from local elections and individual-level survey data from the British Election Study, we find that, politically, those areas that experienced Brexit-related out- put losses saw increases in support for right-wing populist parties, while the electoral fortunes of the Labour party declined.

Date: 2026
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