However, some economists note that the overall picture is also shaped by wider global shocks—including energy crises and broader geopolitical developments.

The research is based on detailed evidence from thousands of UK firms and identifies two main and consistent drivers behind this weaker performance.

Firstly, prolonged uncertainty following the 2016 referendum significantly affected business confidence. Many firms delayed or scaled back investment decisions while future trading arrangements remained unclear, creating a long-lasting drag on economic performance.

Secondly, increased trade barriers introduced after leaving the EU single market and customs union in 2021 have added cost and complexity to doing business.

Additional paperwork, regulatory divergence and friction at the border have made exporting more time-consuming and less competitive, particularly for businesses trading with Europe.

These national findings closely align with the insights shared by businesses at Liverpool Welcomes Europe event, held at the Hilton Liverpool on the 18th of June, where companies and stakeholders came together to discuss the realities of trading with the EU post-Brexit.

Across thematic roundtables covering manufacturing, health and life sciences, and digital and creative industries, participants identified the same practical challenges reflected in the latest analysis. Businesses spoke of the operational impact of complex processes, regulatory divergence and barriers to market access, all of which directly affect cost, time and competitiveness.

In manufacturing, firms highlighted the burden of paperwork, customs procedures, compliance requirements particularly in the chemical industry and rules of origin requirements. In life sciences, businesses emphasised the importance of regulatory alignment and mutual recognition to avoid duplication and delays.

Meanwhile, digital and creative companies pointed to the need for clearer frameworks around data, talent mobility and cross-border collaboration.

Importantly, the roundtable discussions were strengthened by the presence of trade representatives from key EU markets, civic officials, consuls and honorary consuls, who reinforced a shared ambition to strengthen ties between European and British entrepreneurial communities and to continue building collaborative economic relationships.

The message from Liverpool’s business community is clear: these are not theoretical issues, but practical barriers affecting day-to-day trade.

Despite this, the discussions also underscored a strong and consistent theme of resilience and adaptability. Liverpool City Region businesses continue to find ways to navigate the challenges, maintain trade relationships and identify new opportunities across European markets.

Looking ahead, attention now turns to the EU–UK Summit on 22 July 2026, which will bring together leaders to discuss the future of the relationship and opportunities for closer cooperation. There is a strong call from Liverpool’s business community for greater alignment, reduced friction and more practical collaboration, ensuring that exporters can focus on growth rather than navigating complex and costly barriers.

The purpose of the Liverpool Welcomes Europe event was clear: to position Liverpool as a leading UK city actively engaging with EU markets, showcasing a dynamic community of outward-looking businesses that are committed to trading internationally and finding practical ways to sustain and grow their relationships with Europe.

Liverpool stands as a confident, resilient and globally connected city—ready to strengthen its partnership with Europe and unlock future growth opportunities.