Yahoo News British families £900 worse off since Brexit vote, Bank of England warns
Brexit has already left British families £900 worse off even before we leave the EU, the Bank of England said today.
Appearing before a committee of MPs, governor Mark Carney said the lost prosperity was revealed in the gap between what households were forecast to earn before the 2016 referendum and what they are getting now.
He told members of the Treasury Committee that it was “a lot of money”.
Downing Street responded that the economy had proved “incredibly resilient”.
The words raised the ominous possibility that the economy could lose more money after the actual departure from the EU in March next year and at the end of the transition period in December 2020.
“If you map it onto household incomes, real household incomes are about £900 lower than we forecast, which is a lot of money,” he said.
The governor said the 2016 official forecasts had included gloomy expectations that the European and global economies were “relatively weak” when in fact they had done well.
Nevertheless, the economy today was “more than one per cent below where it was despite very large stimulus provided by the Bank of England, fiscal easing by the Government and a global and European economies which were much, much stronger than they were previously”.
He went on: “So if you adjust for those factors the economy is about 1¾ up to potentially 2% lower than it would have been, than one would have expected. That’s a reasonable difference.”
Answering the question why the economy had lost out, he said: “Some of it, and we can’t be absolute about it, but some of it is arguably ascribed to Brexit. One of the things we’ve seen is investment spending has been quite weak given all the positives for investment spending.
Asked if the Prime Minister agreed with Mr Carney’s assessment that Britons were worse off after the referendum, a Downing Street spokesman said: “I would point you to the fact that the economy has remained incredibly resilient continuing to grow over the past five years.
"Growth has been stronger than many expected after the referendum and in recent weeks we have seen the lowest net borrowing in over a decade, employment up to a new record high, unemployment at this lowest since 1975, real wages growing, 69,000 first-time buyers benefiting from our stamp duty cut and UK exports rising by nearly 10 per cent in the last year to a new record high.”
