Brexit delivered £1,000 blow to every UK household, BoE rate setter claims

JACK BARNETT

THE SHARP reduction in business investment post-Brexit has dealt a £1,000 blow to every UK household, a rate setter at the Bank of England has claimed.

Speaking to The Overshoot, Jonathan Haskel, an external member of the monetary policy committee (MPC), said the “productivity penalty” caused by a huge drop in capital spending since the 2016 referendum has amounted to 1.3 per cent of lost GDP growth.

If investment had continued on its pre-Brexit trend, the economy would have been around £29bn larger, Haskel said.

A big slowdown in intangible investment, such as intellectual property and boosting employees’ skills, has led to overall UK levels of capital spending to the lowest point since the financial crisis, dragging productivity growth down with it.

“Since the financial crisis, there has been a slowdown in the pace of intangible investment—not so much in the US, but a bit in Europe and a bit in the UK. So that means with less intangible investment going on, that slows productivity,” the rate setter said.