UK households '£1,500 poorer because of Brexit'

UK households are £1,500 worse off than they were predicted to be prior to the Brexit referendum, a think tank has claimed.

Research by the Resolution Foundation, a think-tank with a focus on living standards, found that higher inflation following the Brexit vote meant that household incomes were around £1,500 lower today than they were expected to be before June 2016.

The report also found that the UK had “experienced the sharpest growth slowdown of any economy for which the OECD publish data”.

It continued: “The UK has gone from being one of the fastest growing economies in the G7 pre-referendum to one of the slowest.

“It also demonstrates that the UK’s strong performance on employment since the referendum has been outweighed by higher inflation and weaker nominal pay growth. By the end of 2018, real household disposable income was £1,500 lower than the Office for Budget Responsibility’s pre-referendum forecast – with over half of this income hit due to higher-than-forecast inflation.”

Income growth fell from 4.9% in 2015 to -0.1% in 2017, the think tank said, adding: “Had household incomes grown in line with other advanced economies, they would have been £2,000 higher.”

The report coincides with data from the Office for National Statistics showing that the UK saw the slowest annual economic growth last year since 2012, while last week, the Bank of England predicted that the British economy would grew by just 1.2% in 2019 and 1.5% in 2020. That was parring back on an earlier forecast, made in November, for growth of 1.7% in both years.

James Smith, research director at the Resolution Foundation, said: “As we approach Brexit day on 29 March, politicians in all parties need to recognise how much is at stake for family living standards, and that how the country goes forward – not just where it is heading – matters for household incomes in the here and now.”