Overview
- In recent speeches in the UK and at the IMF, the chancellor said Britain’s productivity problem has been compounded by how the country left the EU, setting the stage for November’s Budget.
- The Office for Budget Responsibility estimates long‑term productivity is about 4% lower than if the UK had remained in the EU, and Bank of England governor Andrew Bailey said the growth impact will be negative for the foreseeable future.
- Reeves indicated the OBR is poised to revise supply‑side forecasts, with ING estimating this could cut at least £12bn from her fiscal headroom, according to market analysis.
- Researchers report measurable trade losses since Brexit, including Centre for Economic Performance findings of average falls in exports and imports and OBR projections of long‑term reductions in both.
- Critics including Liberal Democrat leader Ed Davey accuse the government of a political ruse before the Budget, while ministers maintain red lines against rejoining the single market or customs union and pursue limited fixes and regulatory “freedoms.”