Brexit partly to blame for high inflation, says Bank of England economist

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Brexit is partly to blame for high levels of inflation in the UK, says the Bank of England's chief economist.

Huw Pill said Britain's exit from the EU had an impact on prices as food inflation soared to 12.4% to hit a new high during the cost crisis of life.

"Brexit plays a role, but I don't think that's the whole story and probably only part of the story. But in my opinion, it had a some effect," Pill said on Wednesday.

The chief economist said post-Brexit labor shortages had worsened inflation and contributed to pressure on prices among businesses.

He said Brexit had made it more difficult for businesses to hire EU staff - questioning whether the shift to non-EU migrants had been as "produ ctive” for the UK economy.

“Whether these people are immediately productive and fungible in the labor market, I think is at least debatable,” Mr Pill told the conference. the Institute of Chartered Accountants, according to Bloomberg.

Earlier this month, Bank of England officials told Treasury Select Committee MPs that the he impact of Brexit was hitting UK trade around the world.

“It is undeniable now that we are seeing a much, much bigger slowdown in UK trade compared to the rest of the world,” said Swati Dhingra, an external member of the Bank's Monetary Policy Committee (MPC).

"There is also the services export side...again, there is very strong stagnation. We are definitely below trend in terms of export numbers, in terms of imports, probably even a bit more than that,” she added.

Catherine Mann, another MPC member said businesses were hardest hit by Brexit due to extra paperwork, which also contributed to inflation.

Latest analysis shows export growth of the UK is well below that of other major economies, including Germany and France, despite the government saying Brexit would boost UK business overseas.

Figures compiled by the Commons Library show that UK trade exports grew by just 24.4% between 2010 and 2021, the lowest growth rate among G7 countries except Japan. The EU recorded an average export growth of 35.5% over the same period.

The Tony Blair Institute...