Brexit investment slump  'costs UK households £1,000 each'         

Bank of England says Britain was 'stopped in its tracks' by Brexit

Bank of England policy maker said the UK 'suffered much more' from its productivity woes since exiting the European Union led to a sharp drop in the pace of business investment.

A Bank of England policy maker has warned a wave of business investment was “stopped in its tracks” by Brexit, dealing a blow to the British economy worth £1,000 for each household.

Jonathan Haskel, an external member of the Monetary Policy Committee, said the UK “suffered much more” from its productivity woes since exiting the European Union led to a sharp drop in the pace of business investment.

The remarks are the latest warning from officials at the central bank about the economic impact of Brexit, as concern mounts that Britain is headed into a protracted slump. 

Investment by British businesses, which have been plagued by uncertainty and weaker trade ties to the EU, has lagged behind previous performance and other countries since Brexit.

Mr Haskel said the “productivity penalty” from Brexit was currently 1.3% of GDP, or about £29bn (€32.8bn) in total, or £1,000 per household. By the end of the Bank of England's forecast period, the penalty will increase to 2.8% of GDP, he added. 

“If you look in the period up to 2016, it’s true that we had a bigger slowdown in productivity up to 2016, but we had a lot of investment,” he said in a web podcast. “We had a big boom between 2012-ish to 2016,” Mr Haskel said. 

“But then investment just plateaued from 2016, and we dropped to the bottom of G7 countries,” he said. 

The Bank of England recently said Brexit was part of a potent mix of factors reducing the UK economy’s potential growth. At its February Monetary Policy Report, the central bank warned business investment was “very subdued”. 

Britain "suffered much more,” Mr Haskel said. 

“A bit of that is that we have this larger financial sector. But I think it really goes back to Brexit.  

“We were at the top of the wave, of investment in 2012. If we pushed that out a little bit, then our slowdown may not have looked quite so bad, but it was stopped in its tracks in 2016,” he said. 

• Bloomberg