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Brexit investment slump cost UK households £1,000 each       


Bank of England Policy Maker Warns Brexit Stopped Wave of Investment

A Bank of England policy maker has warned that Brexit has caused a sharp drop in business investment, dealing a blow to the British economy worth £1,000 for each household.

Jonathan Haskel, an external member of the Monetary Policy Committee, said the UK has “suffered much more” from its productivity woes since exiting the European Union. Investment by British businesses has lagged behind previous performance and other countries since Brexit, with the “productivity penalty” currently estimated at 1.3% of GDP, or about £29bn (€32.8bn) in total.

“We had a big boom between 2012-ish to 2016,” Mr Haskel said in a web podcast. “But then investment just plateaued from 2016, and we dropped to the bottom of G7 countries.”

The Bank of England recently said Brexit was part of a potent mix of factors reducing the UK economy’s potential growth, with business investment “very subdued”.

“We were at the top of the wave, of investment in 2012. If we pushed that out a little bit, then our slowdown may not have looked quite so bad, but it was stopped in its tracks in 2016,” Mr Haskel said.

The warning from the Bank of England policy maker comes as concern mounts that Britain is headed into a protracted slump due to the economic impact of Brexit. According to Mr Haskel, the “productivity penalty” from Brexit is expected to increase to 2.8% of GDP by the end of the Bank of England’s forecast period, equating to a loss of £1,000 per household.