Bad effects Swati Dhingra, a member of the Bank’s Monetary Policy Committee, says Brexit has “contributed to higher prices and lower incomes »
The Bank of England, in London on 3 November 2022. — Kin Cheung/AP/SIPA
The British are still suffering the effects of Brexit. Six years after the vote on leaving the European Union, and almost two years after its effective entry into force, this decision continues to have a negative effect on foreign trade and weighs on incomes, aggravating in the United Kingdom the economic crisis which is also shaking the rest of the world, affirmed; members of the Bank of England (BoE).
“There is a long-term effect on productivity, I believe around 3%,” Wednesday before the Treasury Committee of the British Parliament Andrew Bailey, Governor of the BoE, citing estimates published “short time” after the referendum and which, according to him, have not changed. The weight of Brexit on foreign trade comes on top of the successive shocks of the pandemic and the surge in energy prices caused by the war in Ukraine.
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The budget expected this Thursday
“We are seeing a slowdown in trade in the UK much faster than in the rest of the world,” Swati Dhingra, Committee member Monetary Policy Statement (MPC) of the BoE. A specialist in international trade, she believes that the Brexit referendum has “contributed; to an increase in prices and a reduction in income,” with real wages she said “2.6% lower than they would have been;” following the trend” ahead of the vote.
BoE members answered questions from parliamentarians as UK inflation hit a 41-year high in the UK. 11.1%, well above the Bank’s target of 2%. This Thursday, Prime Minister Rishi Sunak’s government is due to present a budget made up of spending cuts and tax increases.
“If we hadn’t had Brexit, we probably wouldn’t need to talk about an austerity budget;” this week” Michael Saunders, a former member of the BoE, who had accused in an interview with; Bloomberg TV’s exit from the European Union to have “done permanent damage to UK economy.
GDP down 0.2% in Q3
Since the end of 2021, the BoE has raised to its rates several times to raise them to 3%, a high since 2008, but signaled at its last meeting that it could slow down these increases to avoid worsening the recession it already believes has occurred. started in the UK. If the BoE met market expectations; which was hoping at the time of its last meeting for more rate hikes, the recession would last eight quarters, it warned. Over this period, “GDP would fall by 3%, and by a little less than 2% at the end of the year. constant rate,” Andrew Bailey. UK GDP contracted 0.2% in the third quarter. It takes two consecutive quarters of decline in activity. to be officially in recession.