People are already poorer because of Brexit

BREXIT has already started to make UK citizens poorer and more pain is likely in the months and years to come, a new study has warned.

Although last year’s vote to quit the European Union has had “no obvious effect” on GDP growth, the collapse in the value of the pound – down 13 per cent against the US dollar and nine per cent against the euro by the end of April – has fuelled a surge in inflation from 0.5 per cent to 2.7 per cent and a fall in real wage growth from 1.3 per cent to minus 0.5 per cent, the report from the London School of Economics Centre for Economic Performance found.

And leaving the EU without a new trade deal, as Prime Minister Theresa May has threatened, would be the “worst-case scenario” for the UK economy, adding to the country’s woes by cutting trade and GDP, the report said.

The study cited research suggesting such an outcome would reduce national income per head of population by 2.6 per cent (£1,890) over 10 years.

It would be twice as damaging as a Norway-style non-EU membership of the single market, which would limit the cut in per capita income to 1.3 per cent.

Co-author Thomas Sampson said Labour and the Conservatives plans to “take back control” rather than making Brexit work for the UK economy would “inevitably” be bad for living standards.

Mr Sampson added that leaving the single market was “not an inevitable consequence of the referendum and will increase the economic costs of Brexit. The vote has already hurt the UK by reducing real wage growth. More pain is likely.”