Brexit has wiped out £29 billion in business investment and exacerbated the slowdown in UK productivity, according to a Bank of England interest rate setter, Report informs referring to the Financial Times.
Jonathan Haskel, an external member of the Bank’s Monetary Policy Committee, said the lack of business investment growth since the 2016 referendum was equivalent to 1.3 percent of UK gross domestic product, or about £1,000 per household.
He added that penalty would probably rise to about 2.8 percent of GDP at the end of the BoE’s forecast period in 2026.
Haskel’s comments follow a pledge last month by UK prime minister Rishi Sunak to “grow the economy”, in part by taking advantage of post-Brexit freedoms.
Business investment is crucial to productivity growth because it can boost the value of workers’ output, which in turn enables wages to rise.
But in an interview with economics website The Overshoot, Haskel said capital spending had “flattened out” after the referendum, instead of rising as it “did in more or less every other country”.
He added that part of the UK’s recent productivity slowdown “really goes back to Brexit”, with the country in last place among G7 members for investment growth since 2016.