Carney says Brexit has cost economy billions

Economy is about 1 percentage point smaller than if referendum went the other way

Bank of England Governor Mark Carney said Brexit has already cost the UK economy billions of pounds in lost output and it’s not benefiting yet from a global pickup.

Asked in a BBC radio interview to quantify the damage from Brexit, he said the economy is now about 1 percentage point smaller than it would have been had the 2016 European Union referendum gone the other way, and that the gap will widen to about 2 percentage UK Prime Minister Theresa May’s office slapped down Philip Hammond for saying he hoped Brexit would bring only modest changes, after his comments enraged the eurosceptic lawmakers May needs to stay in her job. The chancellor of the exchequer said he wanted an ambitious Brexit deal that replicates Britain’s current easy trade terms with the EU and moves the economy “very modestly apart” from the bloc. Speaking to business leaders in Davos, he also risked a joke at May’s expense, mocking her ill-fated decision to call an early election last year. But amid mounting unease from the pro-Brexit wing of the Conservative Party, an official in May’s office hit back later on Thursday, distancing the prime minister from his comments. points by the end of the year. “What it works out to is tens of billions of pounds lower economic activity,” he said. “The question then is how do we make that up over time by growing above potential.”

Based on the estimated size of the economy at the end of 2017, the lost output would amount to about £40 billion (Dh209 billion, $57 billion).

That’s equivalent to two “Brexit buses,” a reference to the £350 million a week — or almost £20 billion a year — that Leave campaigners said would be available for spending after Britain stopped contributing to the EU budget.

The Times newspaper reported last week that Carney was asked at an event at the World Economic Forum in Davos to measure lost output in “Brexit buses.”

In the BBC interview, Carney said the UK could “recouple” with the global economy, which is enjoying its fastest growth since the financial crisis. For now, companies are holding back on investment plans as they wait to see what Britain’s trade relationships will be after it leaves the EU.