How this instrument works
This instrument turns a single published macroeconomic claim — that leaving the EU shrank UK output by some long-run percentage — into a dollar figure against a base you choose. The UK Office for Budget Responsibility's central estimate puts that long-run hit at roughly 4% of GDP, a figure economists, journalists and business analysts cite constantly without ever seeing what it means in concrete terms. Multiply it against a $50,000 income and the abstraction becomes $2,000. Multiply it against a firm's revenue or a region's output and the same arithmetic scales with it.
The formula is deliberately a single multiplication: cost equals the base times the impact percentage. That plainness is the point — the 4% figure already carries every assumption an economist made building it (trade friction, lost investment, reduced migration, productivity drag, compounded over years), and this sheet does not pretend to add precision the underlying estimate does not have. What it excludes matters too: it ignores sector variance (financial services and manufacturing were hit differently), timing (the effect accrued gradually, not in one year), and currency movements that shift a dollar-denominated read of a UK figure.
People reach for this when they need to argue with a number rather than just repeat it. A small-business owner with UK suppliers sizing rough exposure, a student checking whether a headline claim holds together, or an analyst comparing the OBR's 4% against a lower or higher published estimate all use it the same way — swap the percentage, watch the dollar figure move, and see how much of the conclusion rides on which economist's model you trust.
- Enter Annual income or economic output base, $ — your salary, a firm's revenue, or any output figure you want to test the estimate against.
- Set Estimated long-run GDP impact, % — the percentage from a published estimate; the OBR's widely cited figure is about 4.
- Read Estimated economic cost — the dollar amount that base and percentage together imply.
- Change the percentage to a different published estimate (Bank of England, NIESR, or your own assumption) to see how much the result depends on whose number you use.
Worked example — a $50,000 base at the OBR's 4% estimate
Set the base to $50,000 and the impact to 4%, matching the Office for Budget Responsibility's widely cited long-run estimate that Brexit reduced UK GDP by roughly that much. The instrument returns $2,000 — the plain product of $50,000 and 0.04. That figure is not a forecast of what happens to any one household or firm; it is what the national-scale percentage looks like once it is rescaled to a smaller number.
Change the inputs to a $100,000 base at a more conservative 2.5% estimate and the result drops to $2,500 on the larger base — smaller than the 4% read on $50,000 despite the bigger starting figure, which is exactly the kind of comparison this sheet is built to make. Running several published percentages against the same base shows how wide the range of credible estimates really is before anyone tells you which one to believe.
Questions
Where does the 4% GDP impact figure come from?
It is the UK Office for Budget Responsibility's central long-run estimate of how much smaller UK GDP is expected to be outside the EU, built from assumptions about trade friction, investment and productivity. Other institutions have published figures ranging from roughly 2% to over 5%, so the field is left open for you to enter whichever published estimate you want to test.
Is the dollar result a forecast for my own finances?
No. The calculator rescales a national macroeconomic percentage against whatever base you type in — it does not model your income, your sector, or your region specifically. Treat the output as what a headline percentage looks like in concrete terms, not as personal financial advice or a prediction of your actual exposure.
Why does the formula not account for how the impact builds up over time?
The 4% figure the OBR and similar bodies publish is already a long-run, cumulative estimate — it describes where GDP is expected to settle years out, not a single year's change. Adding a separate timing curve on top would double-count an effect the published percentage already bakes in, so the tool keeps the two numbers as a direct, single-step product.
Can I use a business's revenue instead of personal income?
Yes — the income or output field accepts any dollar base you want to test, including company revenue, departmental budget, or regional GDP. The arithmetic does not change; only the number you are rescaling does, which is why the field is labelled as a general base rather than strictly a salary.
How is this different from an inflation or compound-growth calculator?
Inflation and compound-growth tools model a rate applied repeatedly over time to a value that keeps changing. This one applies a single, already long-run percentage once, to a base you supply, to answer a narrower question: what does a published macro estimate translate to in dollars, not how a balance evolves year over year.
Why do estimates of Brexit's GDP impact vary so much between sources?
Each institution builds its own model of trade flows, migration, investment and productivity, and small differences in those assumptions compound into a noticeably different headline percentage. That is precisely why the impact field is editable here rather than fixed — comparing the same base against several institutions' published figures shows how much the conclusion depends on the modeling choices behind it.
References
- UK Office for Budget Responsibility — independent economic and fiscal forecasts
- Bank of England — research and analysis on the UK economy
Read this first: This instrument shows arithmetic, not advice. Real offers add fees, taxes and terms that vary by lender and place — verify the figures against your actual paperwork before deciding anything.