Brexit partly to blame for high inflation, says Bank of England economist

Brexit partly responsible for high levels of inflation In the UK, the bank of englandChief Economist has said.

Huw Pil said Britain’s exit from the EU is having an impact on prices, as food inflation rose to a new record high of 12.4 percent. the cost of living Problem.

“Brexit has probably eased some of the competitive pressures in the goods market, because it is harder for the UK to import things from Europe … which has probably proved somewhat inflationary,” the chief economist told a conference call on Wednesday. “

Asked about the wider contribution of Brexit to Britain’s economic crisis, Mr Pill said: “Brexit plays a role, but I don’t think it is the whole story and probably only part of the story. But in my mind It has had some effect.

He also told the ICAEW accountancy conference that Brexit had made it more difficult for companies to hire staff from the EU – questioning whether relocating non-EU migrants would be “productive” for the UK economy. was.

“Whether those people are immediately productive and alternative in the labor market I think is open to question at least,” Mr Pill said.

Earlier this month, Bank of England officials told MPs on the Treasury Select Committee the effects of Brexit on UK trade around the world.

“It cannot be denied that we are seeing a much bigger slowdown in business in the UK than in the rest of the world,” said Swati Dhingra, an outside member of the bank’s monetary policy committee (MPC).

“There is also the service export side… there again, we are seeing a really strong pause. In terms of export numbers, we are definitely demonstrating a downward trend, maybe even a bit bigger than that in terms of imports.”

Another member of the MPC, Catherine Mann, said small firms are being hurt the most by Brexit because of the extra paperwork, which is also driving up inflation.

Latest analysis shows Britain’s export growth has fallen well in comparison with other major economies including Germany and France, despite the government’s claims that Brexit will boost British business overseas.

Figures collated by the Commons Library show that UK merchandise exports are set to grow by only 24.4 per cent between 2010 and 2021, the lowest growth rate among G7 countries apart from Japan. The European Union registered an average growth of 35.5 per cent in exports during the same period.

The Tony Blair Institute said Britain’s poor economic performance shows the time has come for Rishi Sunak to “rethink” the Brexit trade deal already agreed with the EU as part of an effort to build closer economic ties with the bloc.

It comes as food inflation rose significantly to 12.4 per cent from October’s 11.6 per cent – the highest rate on record as energy, animal feed and transport costs rocketed, forcing prices up.

“Winter is looming large as downward pressure on prices continues unabated,” said Helen Dickinson, chief executive of the British Retail Consortium.