Brexit has had a bigger impact on the UK economy than the covid pandemic and the lockdowns that came with it, according to the chairman of the UK fiscal watchdog.
Richard Hughes said the independent Office for Budget Responsibility (OBR) had assumed leaving the EU would “reduce our long run GDP by around four per cent.”
“We think that the effect of the pandemic will reduce that output by a further two per cent.”
Gross domestic product, or GDP, is a measure of the size of the economy.
Hughes told the BBC: “In the long term it is the case that Brexit has a bigger impact than the pandemic.”
The OBR financial watchdog has also warned that it expects inflation to reach 4.4 per cent which would, Hughes said, be “the highest rate seen in the UK for three decades”.
Such a rise could wipe out any benefit from improved public sector pay or the increase in the minimum wage announced in Rishi Sunak’s budget on Wednesday.
The OBR comments on Brexit echo these from the Tony Blair Institute which said that chancellor Rishi Sunak’s massive National Insurance hike could have been avoided if the UK was still in the EU.
Ian Mulheirn, at the Tony Blair Institute, said: "What the chancellor didn’t mention was that Brexit has cut annual tax revenues by around £30 billion.
"This means that without the Brexit shock most of the past year’s £40 billion tax raid would have been unnecessary.”
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