Jonathan Haskell, an external member of the Bank of England’s Monetary Policy Committee, said the UK’s exit from the European Union cost it $35 billion and exacerbated the slowdown in UK productivity.

This happened according to what was posted with reference to it.Financial TimesThe lack of growth in business investment since the 2016 referendum contributed 1.3% of UK GDP, or about £1,000 per family, he said.

Haskell said the fine is likely to rise to around 2.8% of GDP at the end of the BoE’s forecast period in 2026.

Haskell’s comments follow British Prime Minister Rishi Sunak’s pledge last month to “grow the economy”, in part by exploiting post-Brexit freedoms. Business investment is critical to productivity growth because it can increase the value of workers’ output, which in turn leads to higher wages.

Haskell also went on to say that capital spending “decreased” after the referendum rather than increased as it did in almost every other country, adding that part of the UK’s recent productivity slowdown “is actually due to Brexit”, with the country finishing last in the rankings. G7 members by investment growth rate since 2016.

The Office for National Statistics last week revised up the real value of business investment over the past year from previous estimates, showing a 4.8% increase between the third and fourth quarters of 2022. As a result, business investment has returned to pre-coronavirus levels. and the level reached during the Brexit referendum, but investment is still well below the level it would have been if investment had continued to rise at the pace before the referendum.

This contrasts with other countries such as the US, where business investment rose 24% in the six years to Q4 2022, according to separate official figures.

The business investment gap estimate adds to the evidence for the so-called impact of Brexit on the economy, as the Bank of England previously estimated trade in goods to be about 10-15% lower than it would be if the UK had not left the EU, which equates to about 3.2 % of GDP.

The central bank noted that since January 2021, trade volumes have been lower than official data indicate, partly due to systemic failures that delayed customs declarations in 2021.

Haskell continues that the pandemic, Brexit, Brexit, and the war in Ukraine have resulted in “extremely high levels of uncertainty,” requiring a more cautious approach to controlling inflation.

“I don’t include a medium-term outlook because there is a lot of uncertainty,” he said, and Haskell warned that one should really be cautious about the “worst-case inflation outcome,” despite optimistic forecasts that inflation is at 10.5 % will decrease. sharply this year as energy price growth slows, adding that one of the consequences of inflation is “a highly entrenched inflationary momentum that will then continue to drive inflation above the level.”

Haskell voted to raise interest rates by half a percentage point to 4% at the latest meeting of the Monetary Policy Committee on Feb. 2, and although two members voted against the change, the committee decided to raise rates to their highest level since 2008.

The Treasury said: “We do not recognize these figures. The government is making the most of the Brexit freedoms to boost the economy, including ambitious reforms in the financial services sector that will open up more than £100bn of investment. We are reviewing the received rules. .” EU in other important growth sectors during the year.

Source: Financial Times

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Robin Jackson is the editor-in-chief at 24PalNews. As an editor and author who covers business and finance, Robin shares the latest business news, trends, and insights with his extensive audience.

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