Brexit boosts growth in food prices as the country approaches recession, senior Bank of England’s politician warned.
Swati Dhingra – new member of bank money policy committee (MPC), which sets interest rates – also used the interview with in Observer assume that the future run of central bank rate rises should peak below 4.5%, which is the level some city investors are expecting. ” market likely to underestimate the damage that [level of interest rates] power cause to the UK economy,” she said.
Dingra argues that further aggressive moves raise cost of borrowing from current level of 3% would risk exacerbating the economic downturn in the UK.
IPC will do its job next decision on interest rates on December 15, after the introduction of eight consecutive increases in a year control inflation.
Dhingra said, “That’s what I think we are should everyone’s worried about… we’re about to finish up extension and deepening of the recession if tightening continues for pace this is?”
trade London School expert of economics (LSE), who repeatedly warned of the damage caused by Brexit before joining bank in August, said they were clear signs of exit from the EU exacerbated the rise in prices and aggravated down in economy. People “need be aware of of what economic cost there is,” she said.
While invasion of Ukraine and the consequences of Covid were far away more significant drivers of Great Britain cost of live shock, she said, it’s important to highlight the damage that Brexit has done also Performed. “I’m not going to make a political choice statement of this, she said, but added: “If it was a political choice, and it would have some economic cost, then people need be aware of of what is this economy cost is. And whether changes whether they are intelligent or not is another matter.”
Researchers from the LSE Center for Economic Performance Alert last the week that Brexit was added nearly £6bn into UK food accounts in two years to go of 2021, with delays at the border, bureaucracy and other costs that increase price of food by about 3% per year year.
Dingra said three quarters of Imports to the UK were from the EU meaning “naturally if non-tariff barriers start kick in there we will see that – not completely, but to some extent – in product prices.
She is added: “No matter what of analysis you are looking at” was the minimum economic hit from Brexit of 2% of GDP from trade effects alone. This will be further reinforced by costs from weaker business investment, declining foreign direct investment and reduced performance.
Dingra is latest in line of Bank of England figures who broke the silence about negative consequences of Brexit on in economy.
latest Opinion poll for in Observer shows that two thirds of voters (66%) now think Brexit “went bad” with just 22% thinking it went well. Even conservative voters are fairly evenly divided, with 51% said everything went well and 39% said everything went bad.
Among all voters total of 59% want return to the EU (34%) or establish closer relations while remaining outside block (25%). Only 15% want status quo and 14% want do even less with EU. About 63% believe the UK should have a relationship that allow it restore access EU single market, against fourteen% who resist the idea.
AT sign what people dislike more and more reality of border controls57% support deletion of all documents and identity checks (such as a passport controls and documents for exports and imports), while 21% do not.
Dingra said drop in the pound was the biggest depreciation immediately after the 2016 referendum for Any of in the world’s four major currencies since 1944. This, she says, is “really big news” in terms of The impact of Brexit, as depreciation “revealed up as reduced real wages, as well as through prices going up as cost of imports have increased.
At the same time, the uncertainty over UK economy policy since vote contributed to the stagnation in terms of business investment,” she said. Great Britain trade with The EU fell sharply after the end of transition period on December 31, 2020, and Dingra said there are signs that Brexit is still having an impact. “This is largely clear from the data that is currently coming in that there has been a slowdown.”