The result of the 2016 referendum has been a “productivity penalty” amounting to £29bn – the equivalent of £1,000 per household, a senior Bank of England policy-maker has said
The 2016 referendum result led to business investment being ‘stopped in its tracks’ and a ‘productivity penalty’ of £29bn, says Professor Jonathan Haskel
“If you look in the period to 2016, it’s true that we had a bigger slowdown in productivity up to 2016, but we had a lot of investment. But investment just plateaued from 2016, and we dropped to the bottom of G7 countries.” A lack of business investment growth since the Brexit referendum was equivalent to 1.3 per cent of UK gross domestic product, or about £1,000 per household, he said in an interview with the economics websiteHe added that that penalty would probably rise to about 2.8 per cent of GDP by 2026. “What you notice is that when countries join trading blocs, trade goes up. There are very few examples of countries withdrawing from trading blocs.
Capital investment, crucial to boosting output, had “flattened out” after the Brexit referendum, instead of rising as it “did in more or less every other country”, Professor Haskel said.
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