(Bloomberg) — Former Bank of England policy maker Michael Saunders said Britain’s exit from the European Union one of the reasons why the UK is now entering a period of austerity.
“The UK economy as a whole has been permanently damaged by Brexit,” Saunders said in an interview with Bloomberg TV on Monday. “If we hadn’t had Brexit, we probably wouldn’t be talking about an austerity budget this week. The need for tax rises, spending cuts wouldn’t be there.”
He said that the UK’s decision to leave the EU and the customs union reduced the country’s potential economic output and eroded business investment. His comments echoed the sentiment last week by the head of the British Chambers of Commerce, Shevaun Haviland, who said that British firms haven’t seen any upsides from Brexit so far.
The remarks add to growing criticism of the central accomplishment of the Conservative government, which after a referendum in 2016 decided to implement a strict break from the EU. It also feeds into debate about how Prime Minister Rishi Sunak’s should handle the economy, which the BOE says is already in recession.
Saunders, who sat on the Monetary Policy Committee until August and is now senior economist at Oxford Economics, said that Chancellor of the Exchequer Jeremy Hunt should focus on improving trade links with the EU. He also pointed toward improving education and training as ways to boost productivity, as well as fixing the rise in long-term sickness, which has driven large swaths of people out of the workforce since the pandemic.
Saunders also said that the chancellor’s fiscal statement on Thursday should include measures that avoid damaging the economy further. So far, Hunt has suggested he’ll cut spending and raise taxes to plug the Treasury’s widening deficit — delivering a squeeze on the economy at a time the economy is shrinking.
The former BOE official suggested policies included introducing a tiered system of interest rates on banks reserves, reducing tax relief for top rate taxpayers on pension contributions, closing some of the tax loopholes open to non-domiciled residents, and reducing the tax-free allowance on dividend income.
“These kinds of measures would probably have a less adverse immediate effect on the economy than raising the headline tax rates or cutting the main departmental public spending,” said Saunders.
Read more:
Mark Carney Says Brexit Has Weakened the UK Currency and Economy
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
