Brexit to further slash inflation-hit wages
NNN: Britain’s departure from the European Union will drive down workers’ wages even further for years to come, a study found on Wednesday, as the nation already faces a cost-of-living crisis due to soaring inflation.
The research, by the Resolution Foundation, a think tank and the London School of Economics, was published as official data showed UK inflation hitting a new 40-year high at 9.1 percent.
And Wednesday’s report claimed that Brexit had affected the openness and competitiveness of the UK economy abroad.
As a result, household incomes, already under intense pressure from runaway inflation, are forecast to fall further.
“It will take many years for the economy to adjust…but the aggregate effect will be a reduction in household income as a result of a weaker pound and lower investment and trade,” the report reads.
A weaker pound had also increased import costs, it added.
The report forecast that Brexit would cause a 1.8 percent drop in real wages, or inflation-adjusted earnings, by the end of the decade.
That equated to a loss of £470 ($577) per worker per year, it added.
“Brexit is not expected to transform the nature of the UK economy,” the report concluded.
“Instead, the impact of Brexit is best seen as a generalized reduction in the pay and productivity of workers.”
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