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The Bank of England warns that Brexit could boost inflation

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Swati DhingraA member of Bank of England Monetary Policy CommitteeIt admitted this Wednesday that it contributed to Brexit Raise prices and lower wages In the United Kingdom, in addition to post-pandemic trade flow reductions relative to other advanced economies. “It is undeniable that we are seeing a much bigger slowdown in trade in the UK than in the rest of the world,” Dhingra told the committee. House of Commons TreasuryIn front of the Central Bank Governor appearing next to him, Andrew Bailey.

For economists, output European Union (EU) Real wages are pushed 2.6% below what they could be Foodgrains have become expensive in the country by about 6 percent.. The UK consumer price index (CPI) was 11.1% in October, compared with 10.1% in September, the highest level in 41 years, the Office for National Statistics (ONS) reported on Wednesday.)

Bailey, for his part, stressed that the Bank maintains its analysis that Brexit could About 3% is the effect In the British economy. “As a public official I am neutral on Brexit myself, but I am not neutral to say that is the most likely economic outcome,” he said.

The governor of the issuing bank emphasized the “dramatic difference” in the evolution of British GDP after the coronavirus pandemic compared to other advanced countries. The size of the UK economy It has decreased by 0.7% compared to the end of 2019While the eurozone is 2.1% higher and the US is 4.2% higher, Bailey said.

‘Shock’ in labor market

“Many factors contributed” to this evolution, the governor said, one of which was the decline in the number of active workers after the pandemic. “The United Kingdom is the only OECD country to have recorded this ‘shock’ in the labor market“, he claimed.

Bailey also hinted at the United Kingdom Its “international reputation” has been damaged Aggressive tax cuts forced former Prime Minister Liz Truss to step down after storming financial markets. “It will cost more to rebuild that reputation than to straighten the borrowing cost curve,” the Bank of England governor said.

Source: lainformacion.com

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