Cost of living crisis has 'very little to do with Brexit', says Jacob Rees-Mogg

Watch: Cost of living crisis ‘very little to do with Brexit,’ says Rees-Mogg

The UK's cost-of-living crisis has "very little to do with Brexit", says Jacob Rees-Mogg.

The Brexit opportunities and government efficiency minister insisted there were a number of other factors contributing to the current economic downturn.

Inflation - the rate at which prices increase - was recorded at 9.1% for May, its highest level since March 1982.

Britons are also dealing with soaring fuel costs - the average price of a litre of petrol at UK forecourts reached a new high of 191.5p on Sunday, while the average price of diesel was 199.0p per litre.

The Office for Budget Responsibility (OBR), which provides independent financial forecasts to the government, said in March that the UK has "missed out on much of the recovery in global trade" following the coronavirus pandemic because of Brexit.

Brexit opportunities minister Jacob Rees-Mogg said leaving the EU has not caused the cost of living crisis. (LBC)
Brexit opportunities minister Jacob Rees-Mogg said leaving the EU has not caused the cost of living crisis. (LBC)

It forecast that Brexit would lower productivity in the UK by 4% over the next 15 years. The OBR also estimated that leaving the European Union would lead to UK imports and exports being 15% lower than had it remained.

The OBR has said previously that Brexit's impact on the UK economy was worse than the pandemic.

But Rees-Mogg insisted on Monday that Brexit was not to blame for the UK's economic position, and appeared to back the notion of abolishing the OBR.

He told LBC radio's Tonight With Andrew Marr show: "We have taken control of our borders so we now decide who comes in here. That seems to be a pretty important gain from Brexit that people wanted. We don't have to take any person from the EU who wishes to come."

He added: "These are headwinds faced across the world, inflation is running across the world.

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Jacob Rees-Mogg speaking to LBC presenter Andrew Marr. (LBC)
Jacob Rees-Mogg speaking to LBC presenter Andrew Marr. (LBC)

"The government is tackling a global, economic problem. It is an inflationary problem and it is a supply chain problem.

"Supply chains are not working across global economies and this is to do with lack of Chinese semi-conductors and cities in China still being closed.

"It is to do with shipping being in the wrong place, this is very little to do with Brexit.

When it was put to him by Marr that the OBR forecast a dip in productivity because of Brexit, Rees-Mogg replied: “When did the OBR ever get a forecast right in its whole history?”

Asked if the government should therefore abolish the official body, he said: “That’s a very interesting idea.”

Pressed on whether he was in favour of this move, he said: “It’s a matter for the chancellor.”

Labour leader Sir Keir Starmer, speaking at the Centre for European Reform in London, where he has ruled out rejoining the EU or the single market if Labour comes to power, insisting such moves would sow further division in Britain. Picture date: Monday July 4, 2022.
Labour leader Sir Keir Starmer ruled out rejoining the EU or the single market if Labour comes to power in a speech on Monday. (PA)

However, a separate report has also said Brexit will reduce the future wages of workers across Britain.

According to a report by the Resolution Foundation earlier this month, pay packets will be £470 lower per worker every year by 2030 compared to if the UK had remained in the EU.

The authors warned that the impacts of Brexit "will not be evenly spread across regions", with the North East expected to be worst affected.

The Resolution Foundation did note that worst-case scenarios predicting a cliff edge for UK exports to the EU have not materialised.

On Monday, Sir Keir Starmer said the UK will not return to the EU under a Labour government, saying he would try to "make Brexit work".

He committed a future Labour government to keeping the UK out of the single market and the customs union.

Watch: Sir Keir Starmer rules out return to EU or single market under Labour