- Brexit has affected the UK economy more significantly than expected.
- Finance Minister Rachel Reeves emphasized the need to restore relations with the EU.
- The Office for Budget Responsibility estimates a long-term decline in the economy of 4%.
- Britain’s budget deficit reached a five-year high in September.
Brexit and spending cuts under previous governments had a bigger impact on the economy than expected, she said on Tuesday British Finance Minister Rachel Reeves. The current government is therefore trying to restore relations with the European Union (EU), to mitigate the losses businesses have suffered since the Brexit referendum in 2016, the minister told a conference in Birmingham. TASR informs about it based on a Reuters report.
The UK’s Office for Budget Responsibility (OBR) estimates that as a result of Brexit, the economy’s performance will fall by around 4% in the long term compared to if the UK had remained in the EU. The Governor of the British Central Bank (BoE), Andrew Bailey, declared during the weekend that Brexit will have a negative impact on economic growth in the coming years.
Britain’s budget deficit rose above 20 billion pounds (23.01 billion euros) in September, a five-year high. In addition, since the beginning of the current fiscal year, the deficit has recorded the highest level in the history of measures, excluding the period of the pandemic. The reason is increased state spending, largely for debt servicing.
In the six months since the start of the current fiscal year 2025/2026, which began in April, Britain’s budget deficit has reached £99.8 billion. This is £11.5bn more than the same period in the previous financial year. The deficit for this period was thus the second highest since the beginning of measurements in 1993.
