Australia

Brexit has downgraded Britain, made the sterling risky

The situation has led some influential Tories to call for a return to the EU — but that’ll be easier said than done.

British Prime Minister Boris Johnson (Image: AP/Liam McBurney/Pool)

The Bank of England is now between a rock and a hard place: inflation has topped 9% — way above the 2% target mandated by the Treasury. In response, its rulebook says it should lift interest rates — on top of the four rate rises announced since December — to damp down growth.

Yet growth has already stalled: the economy stagnated in February, shrank slightly in March and — with families cutting back on luxuries to pay for food and energy — looks set to slow sharply over the summer.

With much of the cost-of-living surge driven by supply constraints — of gas, food, silicon chips and skilled workers — raising interest rates could knock the economy into a recession, even as the cost-of-living crisis carries on.

Read more about the economic toll Brexit has taken.

Already a subscriber? .
Or, register your email address for a FREE 21-day trial.

! function(f, b, e, v, n, t, s) {
if (f.fbq) return;
n = f.fbq = function() {
n.callMethod ?
n.callMethod.apply(n, arguments) : n.queue.push(arguments)
};
if (!f._fbq) f._fbq = n;
n.push = n;
n.loaded = !0;
n.version = ‘2.0’;
n.queue = [];
t = b.createElement(e);
t.async = !0;
t.src = v;
s = b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t, s)
}(window, document, ‘script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘108339229558248’);
fbq(‘track’, ‘PageView’);

Place of originBrexit has downgraded Britain, made the sterling risky

Back to top button