Brexit has left households RM4,770 worse off, Carney says

LONDONBritish households are about £900 pounds (RM4,770) worse off than they would have been without Brexit, Bank of England (BoE) governor Mark Carney said.

Speaking to lawmakers on the Treasury Committee yesterday, Carney said compared to the bank’s forecasts made in May 2016 — which were based on the UK voting to stay in the European Union — economic output is more than 1% below where officials had expected. That “was predicated on a relatively weak European and global economy”, Carney said, an assumption that has also not panned out in recent years.

Taking the better than expected world growth since then, the economy is up to 2% worse off than officials could have expected, the governor said. That’s a £900 difference when translated into household incomes, “which is a lot of money”.

“There are Brexit effects that come through,” he said, citing inflation driven by the pound’s decline after the referendum vote alongside sluggish wages. The UK’s poor productivity performance is also a factor, he said, as well as weak investment spending. — Bloomberg