[1andrew1]

Brexit chickens coming home to roost at a cost of billions.

The Office for Budget Responsibility will next month downgrade its UK productivity growth estimates and identify Brexit and Covid-19 among the contributory factors, said officials briefed on the independent forecaster’s thinking.

The OBR productivity downgrade will represent a significant part of the overall shortfall that UK chancellor Rachel Reeves has said she will fill through tax and spending cuts.

“The OBR will say clearly that Brexit had a bigger effect on the British economy than they expected, along with Covid,” said one government official. The OBR declined to comment.

A 0.2 percentage point markdown in the OBR’s productivity forecast would cost about £18bn a year.

Andrew Bailey, Bank of England governor, weighed into the debate in Washington on Saturday when he said the economic impact of Brexit would be negative “for the foreseeable future” although in the longer term there should be “a positive, albeit partial, counterbalance”.

Andrew Bailey, Bank of England governor, said the economic impact of Brexit would be negative ‘for the foreseeable future’. Meanwhile Reeves told a key IMF committee in Washington: “The UK’s productivity challenge has been compounded by the way in which the UK left the European Union.”

The 2016 vote for Britain to leave the EU has become an almost taboo subject for many politicians in recent years.

At last year’s general election, the issue was little mentioned. Labour wanted to win back Leave voters, while the Conservatives did not want to talk about a project that had fallen into disrepute with the electorate.

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