Brexit has caused almost twice as much damage to the UK economy than estimated by official forecasts, according to new paper from a group of experts including a senior Bank of England economist.

The research, which has been presented to the Office for Budget Responsibility, shows that the 2016 vote to leave the European Union has cost the country between 6 percent and 8 percent of GDP per person over the last decade, a hit of £180 billion ($235 billion) to £240 billion. The OBR, the government’s independent forecaster, puts the damage at just 4 percent.

The “Economic Impact of Brexit” working paper, published by the National Bureau of Economic Research in the US and co-authored by senior BOE economist Philip Bunn, comes as Chancellor of the Exchequer Rachel Reeves prepares for next week’s budget, when she is expected to claim Brexit is partly responsible for a damaging growth downgrade.

A cut to the OBR’s productivity assumption will account for the bulk of an estimated £20 billion fiscal deterioration since Reeves’ spring statement in March, which she plans to counter with big tax rises. The NBER paper claims that Brexit has lowered productivity alone by 3 percent to 4 percent since 2016, as well as hammering investment and employment.

Reeves pointed the finger at Brexit for the UK’s economic deterioration at the annual meetings of the International Monetary Fund last month. “The UK’s productivity challenge has been compounded by the way in which the UK left the European Union,” she said in a statement. BOE Governor Andrew Bailey argued at the same meetings that Brexit would drag on economic growth for the “foreseeable future.” The BOE has also seen the NBER paper.

The study also comes amid signs of public discontent over Brexit, with a YouGov poll over the summer showing 56 percent of those questioned saying it was wrong for Britain to leave the EU.

Labour wants to reset relations with the EU to recover some of the lost output since Brexit and drive a pickup in tax receipts. Reeves is expected to raise taxes by as much as £30 billion at the budget to fill a hole caused by the OBR downgrade and to reinforce her fiscal credibility. If GDP was 6% larger, she would be £60 billion better off without having to increase taxes at all.

The UK formally left the EU single market and customs union in January 2021, replacing them with a free-trade agreement that went some way to meeting Brexit architect Nigel Farage’s demand for UK sovereignty. His Reform UK party holds a commanding lead over the Labour government in the polls and would likely emerge as the largest party in Parliament if an election was held now.

The NBER paper was referenced on Thursday in a speech by BOE rate-setter Swati Dhingra, a vocal critic of Brexit. She said its smaller-than-expected impact on trade was not a good guide to its effect on the economy as a whole.

“If you look at what firms are reporting in that both in terms of what is happening to business investment as a result of Brexit, as well as what’s happening to productivity and activity more broadly, you start to see much bigger numbers,” Dhingra said in a lecture at the University of Bristol.

The analysis found that even after the Trade and Cooperation Agreement came into effect, the economy continued to fall behind peers as the Brexit “effects accumulated gradually over time.”

To ensure their work was rigorous, the authors used both macro whole-economy data and micro firm-level data to cross-check their findings. They constructed a “synthetic” UK using a “weighted average” of countries that closely matched the UK’s pre‑referendum behavior as well as comparing the impact on firms by their EU exposure. The two approaches came to broadly the same conclusions.

The authors said the impact of Brexit “accumulated gradually” and was hard to identify in 2018, but picked up as uncertainty persisted, trade barriers rose and firms diverted resources away from productive activity. The effect of Brexit appears to be ongoing, with a GDP shortfall of 4–6 percent by 2021 but deeper, at 6-8 percent, in 2025.

The report said leaving the EU increased uncertainty, hurt investment, damaged demand, weakened employment and hit productivity due to “reduced innovation.”