Thursday, October 28, 2021
Authority gives dire prognosis
Brexit hits the economy harder than Corona
The pandemic is weighing on the UK’s economy. A problem for which the British are not to blame – and which they share with the rest of the world. The situation is different with their exit from the EU: It is voluntary – and according to a British authority has worse consequences.
According to an independent British authority, Brexit will have significantly worse consequences for the country’s economy than the pandemic. The exit from the EU will reduce the gross domestic product (GDP) by around 4 percent, said the head of the supervisory authority Office for Budget Responsibility (OBR), Richard Hughes, in an interview on the BBC. The pandemic will reduce GDP by a further 2 percent.
“In the long term, Brexit will have a bigger impact than the pandemic,” stressed Hughes. In its latest report, the advisory body had emphasized that supply bottlenecks due to stricter immigration rules as well as more tariffs and bureaucracy had exacerbated the situation in the UK since Brexit. Finance Minister Rishi Sunak presented his budget on Wednesday. In it he announced billions in aid for numerous industries as well as tax increases.
The OBR then warned that the cost of living could rise faster than it had been in 30 years and that inflation could soar to 5 percent. The Times called Sunak’s tax hikes “immense”. The tabloid “Sun” criticized an “epidemic of government spending”. Sunak had painted a positive picture. He announced that the British economy will reach the pre-Corona level in 2022 and expects growth of 6.5 percent this year and 6 percent next year.