[1andrew1]

Brexit means prices are 4% higher

For we now see clearly that inflation is higher in the UK than in other comparable economies, and has been for some time. Catherine Mann, a distinguished economist who sits on the Bank of England’s monetary policy committee as an independent, calculates that Brexit has meant prices are around 4 per cent higher than they would otherwise be thanks to the cumulative effects of the 2016 EU referendum decision, when set against comparable economies, not least because “no other country chose to unilaterally impose trade barriers on its closest trading partners.”

Disrupting supply chains in and out of the EU added bureaucracy, delays and costs, which stands to reason. Brexit also affected the easy dynamic flow of needed skills and types of workers under the old freedom of movement regime, substituting a clunky, arbitrary, and politicised points-based system for the agile free market system. More people are retiring early, and more are suffering long-term illness because of the lingering effects Covid.

The impact of all that is to create a labour shortage, push wages up (and therefore business costs), and these have been passed on. In some forms they’ve also squeezed profits (for investment). The economy cannot grow without people to work in it.

The attempt to maintain living standards and wages in the face of a reduction in the capacity of the economy to supply goods and services (for lack of workers) made inflation inevitable. Using interest rates and higher taxes to hammer it down aren’t the best weapons in such circumstances; but, barring a much higher level of immigration, they are the only tools the authorities have at their disposal.

https://www.msn.com/en-gb/money/othe...8ebb6f54&ei=26