Bank of England chief Mark Carney: Brexit has cost British households £900

Posted On: 
22nd May 2018

Households are £900 worse off than they would have been without the Brexit vote, Bank of England Governor Mark Carney has claimed.

Bank of England Governor Mark Carney The Bank of England Governor said real household incomes were "about £900 lower than we forecast".
Credit: 
PA

The central bank chief told MPs on the Treasury Committee that, despite faster-than-forecast global growth, the UK economy was up to 2% smaller than the BoE had predicted two years ago - costing households "a lot of money".

“If you look at where the economy is today, relative to that forecast, it’s more than 1 percent below where it was despite very large stimulus provided by the Bank of England, a fiscal easing by the government and global and European economies, which are much much stronger than they were previously,” he said.

Pro-EU campaigners say 'Brexit wet dream has hit reality' after Theresa May climbdown on atomic body

SNP chief Ian Blackford calls on David Mundell to quit over Brexit 'power grab'

Boris Johnson says Theresa May will be 'true to her promises' amid Brexit customs backstop row

“If you adjust for those factors, the economy is about... one and half, one and three-quarters, up to two percent lower than it would have been.”

Mr Carney added: "If you map it onto household incomes, real household incomes are about £900 lower than we forecast - which is a lot of money."

Anti-Brexit campaigners quickly seized on the claim, with Liberal Democrat leader Vince Cable saying it undermined optimistic talk from eurosceptics in the wake of the vote.

“At the time of the Brexit vote the fact that the economy didn’t immediately collapse was argued as proof that leaving the EU was painless," he said.

"We now know that it wasn’t painless, to the extent that households are already £900 a year worse off, and Brexit has not even happened as yet."

The Lib Dem chief added: “Inflation caused by a weak pound and stuttering economic growth are cutting into people’s everyday lives. But we can stop this, because Brexit is not inevitable - people must be allowed a say on the final deal.”

Labour MP David Lammy, speaking for the Best for Britain campaign, said: "It will be my constituents who pay the price for Brexit, not wealthy homeowners in Middle England or Conservative MP's with shares in wealth management companies.

"This hard Brexit will be built on the backs of my constituents and those struggling to make ends meet up and down this country."

'RESILIENT'

But Theresa May's spokesperson struck a bullish tone when questioned on the claim, saying the UK economy had "remained incredibly resilient".

They added: "Growth been stronger than many expected after the referendum, and in recent weeks we've seen the lowest net borrowing in over a decade, employment up to a new record high, unemployment at its lowest level since 1975, real wages growing, 69,000 first time buyers benefiting from our stamp duty cut and UK exports rising by nearly 10% in the past year."

Pressed on the figures, Chancellor Philip Hammond said future household incomes would "depend in part on the quality of the deal that we negotiate as we exit the European Union".

He insisted ministers were "focused on getting the very best deal for British jobs, for British prosperity and for British businesses".