| It was only a matter of time, with the economy effectively in freefall, that someone would mention the B-word.
Over the last week, as inflation and the resulting high interest rates have laid bare the scale of the economic crisis to come, people have started whingeing about Brexit.
First among them was the “unreliable boyfriend” former Threadneedle Street governor Mark Carney.
“There’s no joy in saying: well, ‘we told you so,’” he told The Telegraph last week, before doing exactly that.
“We laid out in advance of Brexit that this will be a negative supply shock for a period of time and the consequence of that will be a weaker pound, higher inflation and weaker growth,” he said.
“And the central bank will need to lean against that. Now that’s exactly what’s happened.”
Others – who were not involved in doom mongering during the Brexit referendum in 2016 – have a different view.
It is clear that Brexit has had some impact on inflation, because it has raised barriers to some imports, made it more difficult to hire foreign workers, and lowered the value of the pound.
But only “a small part” of the current high rates are due to Britain leaving the EU, said Gregory Thwaites, a professor in economics at the University of Nottingham.
“So other things equal, if we were still in the EU, it’d be slightly easier to get workers from the EU and we would have slightly lower inflation because of that,” he said.
Ask around in Westminster, however, and it is the bankers like Mr Carney and his chums who are under fire over the inflation figures.
“I think the Bank of England has made some mistakes along the way,” former Tory chancellor Lord Lamont told me yesterday.
“They should have put rates up earlier. To be honest, I don’t think there is any alternative but to pursue the course of rising interest rates.”
Among Right-leaning MPs, it is a combination of Rishi Sunak’s flaccid economic policy and the Bank’s massive lending spree during the pandemic that is to blame.
“I think there is a need for urgent improvement,” said Simon Clarke, the former Cabinet minister.
“This is not a good central bank. It’s been consistently and badly wrong.
“I think there’ll be many people with grave concerns about how effectively the bank is being run.”
But for the Tories who delivered Brexit, the damage is now done. The public may blame Britain’s exit from the EU, but more likely they’ll blame the Government itself.
A distraught MP warned darkly: “There is nothing now the party can do. We can’t change leader. He won’t change policy.
“We’re going to get absolutely annihilated at the election.” |
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