British workers have been hit with a huge Brexit bill - before we've even left.
The cost of Brexit was never just about the financial loss. From cooperation on crucial issues like climate change and terror, to the freedom to live, love and work across the continent, the benefits of EU membership were laid out – and sadly disbelieved.
Nonetheless, in the month of the Autumn Budget, it’s about the economy, stupid. And a year and a half on from the referendum, we are seeing just how deep those financial tremors people warned about can run.
The first point is that the value of the pound collapsed after the Brexit vote – making the pound in your pocket literally worth less in terms of buying power:
But taken alongside the hit to the UK’s GDP and the relative decline in investment, we can get a clear idea of the overall financial impact so far.
A study released this week analyses data from the Office for National Statistics and other organisations, and shows that British households have lost £600 per head as a direct consequence of our vote to leave the EU.
The report, by the National Institute of Economic and Social Research (NIESR), shows a grim picture:
“The UK economy is estimated to have grown by 1.5 per cent in the year to the third quarter of 2017. This growth rate represents a material loss of momentum from annual rates of GDP growth of around 2 to 3 per cent achieved in the years leading up to the referendum. Productivity growth has also slackened off and output per hour appears to have been flat or falling.”
Report author Dr Garry Young is Director of Macroeconomic Modelling and Forecasting at the NIESR – and was until recently a Senior Adviser to the Bank of England. He writes:
“It is almost certain that the relative deterioration in the UK economy and the accompanying fall in living standards over the past year are a consequence of the vote by the British people to leave the European Union.
“Had sterling not depreciated and the economy continued to grow at its previous rate, as would have been likely with an improving global backdrop, real household disposable income per head might have been more than 2 per cent higher than now, worth over £600 per annum to the average household.
“…The effects of a higher cost of living caused by Brexit might weigh more heavily on unemployed, single parent and pensioner households.”
We have to hope that decline we are witnessing is just a factor of uncertainty. But with increasing talk of a high-tariffs, no-deal Brexit among senior Conservatives, the post-Brexit scenario is not looking too uplifting either.
How much more do British households have to lose before we realise this was all one bad move?
Josiah Mortimer is Editor of Left Foot Forward. Follow him on TwitterLike this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.