News / Economy

Brexit inflicted £40 billion a year on UK: Senior economist

Saturday, 16 February 2019 4:36 PM [ Last Update: Saturday, 16 February 2019 5:28 PM ]

Demonstrators hold mock bank notes, featuring the images of British pro-Brexit conservative politicians Jacob Rees-Mogg (top) and Boris Johnson, as they protest against government Brexit policy in central London on November 5, 2018. (AFP photo)

A senior economist at the Bank of England (BoE) says Britain has lost £40 billion a year since Britons voted to leave the European Union in a June 2016 EU referendum.

Gertjan Vlieghe, a member of the BoE's monetary policy committee, said the Brexit referendum inflicted a 2-percent loss on the UK economy, a figure which he said amounts to £800 million a week, or £40 billion a year.

“That 2% of GDP is not trivial, that’s £40 billion or if you prefer it in bus units, it’s £800 million a week,” said Vlieghe, making a reference to a bus campaigning for Brexit before referendum (pictured below) on which it was written that by leaving the EU, Britain could save £350 million on EU membership fees each week and spend it on National Health Service (NHS).

The BoE has estimated, however, that the total loss on the British economy as a result of Brexit has been around £55 billion.

Vlieghe said Brexit has been a significant domestic economic event which caused growth in the UK to slow at a time when the rest of the world recorded one of its strongest periods for growth of the past decade.

Elaborating on that, the economist said that all other members of the group of seven industrialized nations, known as G7, had experienced an annual growth of six percent in business investment while the figure for the UK economy dropped 3.7 percent last year to stuck around zero.

He also said that Brexit caused a sharp fall in the value of the pound, piling more pressure on the households and slowing the consumer spending.

“UK growth in the past two years has been weaker than we would have expected based on the performance of the global economy alone,” said Vlieghe in a Friday speech in London, adding, “It is very unusual for investment to shrink that much when the rest of the world is doing pretty much just fine, until at least recently.”

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