Chancellor blames Brexit for UK’s economic woes ahead of next month’s autumn statement.
Chancellor Rachel Reeves (Image: Getty)
Rachel Reeves has launched a fresh attack on Brexit ahead of her Budget. The Chancellor insisted Britain’s departure from the EU has done long-term damage to the economy.
In remarks published this weekend, she told an international economic committee at the International Monetary Fund (IMF): “The UK’s productivity challenge has been compounded by the way in which the UK left the European Union.”
Ms Reeves quoted the Office for Budget Responsibility’s estimate of a 4% long-term hit compared to remaining in the bloc. She said the UK “acknowledges this” in seeking stronger trade ties.
It comes as the Chancellor is looking to fill a black hole estimated at around £50 billion by some economists in her statement on November 26 amid intense speculation of major tax hikes.
Ms Reeves earlier this month admitted she was looking at potential tax rises and spending cuts as she partly blamed Brexit.
She told Sky News the economy was still suffering from the impacts of leaving the European Union, austerity policies and Liz Truss’s mini-budget.
She said the OBR had carried out a review over the summer and found “they have consistently overestimated our productivity performance”.
Ms Reeves said that “austerity, Brexit, and the ongoing impact of Liz Truss’s mini-budget, all of those things have weighed heavily on the UK economy”.
She said: “Already, people thought that the UK economy would be 4% smaller because of Brexit.
“Now, of course, we are undoing some of that damage by the deal that we did with the EU earlier this year on food and farming, goods moving between us and the continent, on energy and electricity trading, on an ambitious youth mobility scheme.
“But there is no doubting that the impact of Brexit is severe and long lasting and that’s why we are trying to do trade deals around the world, US, India, but most importantly with the EU so that our exporters here in Britain have a chance to sell things made here all around the world.”