Boris Johnson’s Brexit deal and global trade tensions are likely to hold back growth in the UK economy over the next three years, the Bank of England has said.
British national income will be one per cent lower by 2022 than originally thought, the Bank predicted today in its quarterly deep-dive into the economy.
Most of that lost output is due to “weaker global growth, driven by trade protectionism” as well as higher asset prices, such as the recent rise in the pound, the BoE said.
However, disruption due to Britain moving to new trade arrangements as it leaves the EU under the PM’s Brexit deal is another factor.
The Bank of England’s latest report is the first time it has produced an analysis of a specific Brexit deal. With Britain locked in General Election mode, the downgrading of growth forecasts under the government’s Brexit agreement is likely to prove a controversial move. [...]
In better news for the PM, the Bank said: “The Withdrawal Agreement and extension of the UK’s membership of the EU appears to have reduced Brexit-related uncertainty.” It said some of the gloom over business and households was likely to lift. [...]
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Monetary Policy Report - November 2019 / In focus - Uncertainty and Brexit
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