A leading economist has claimed that Brexit is the ultimate reason why the UK is facing a fresh round of austerity. Michael Saunders, a former external member of the Bank of England's monetary policy committee, said that the UK economy has been 'permanently damaged' by leaving the European Union.
“If we hadn’t had Brexit, we probably wouldn’t be talking about an austerity budget this week," said Mr Saunders in an interview with Bloomberg TV. “It’s reduced the economy’s potential output significantly, eroded business investment. The need for tax rises, spending cuts wouldn’t be there if Brexit hadn’t reduced the economy’s potential output so much.”
Mr Saunders, who left the rate-setting committee in August after six years in the role, said the main legacy of that period was weak economic output. He spoke as the Prime Minister, Rishi Sunak, and the Chancellor, Jeremy Hunt, prepared to reveal their economic plan in this week's autumn statement. Mr Hunt, who is to address parliament on Thursday, warned there would be a “tough road ahead”.
