John McDonnell responds to Bank of England report highlighting the impact of Brexit related uncertainty on the economy

John McDonnell MP, Labour’s Shadow Chancellor, responding to Bank of England commentary highlighting the impact of Brexit related uncertainty on the economy, said:

“The Bank of England has today shown what we already knew: that the government’s refusal to accept Labour’s customs union proposal may be harming investment and the economy.

“This report underscores the consequences of the government’s incompetence and ill-discipline in economic management: falling business investment, weak productivity growth and an economy performing well below its potential.

“A Labour government will put an end to this negligent economic management and tackle problems that have been left unaddressed for far too long.”

Ends

Notes to Editors:

• ·        Bank of England’s May 2019 inflation report is available here: https://www.bankofengland.co.uk/-/media/boe/files/inflation-report/2019/may/inflation-report-may-2019.pdf?la=en&hash=D4985F6D513BF04EB81A28C53F6DB0CFB8CC09FB

• ·        The report notes that “shifting expectations about the potential nature and timing” of Brexit have “continued to weigh on confidence and short-term economic activity, notably business investment”. It also points to “continuing weakness in productivity growth” (all on p. 5).

• ·        It also notes that “if firms expect a much less open trading relationship with the EU, they may scale down investment and the size of their operations” (p. 9). It adds that “reductions in openness as the UK’s trading relationship with the EU changes are likely to reduce the economy’s productive capacity for a period of time” (p. 19).

• ·        The report underscores that business surveys have weakened since the start of the year (p. 7). As well, business investment has had four consecutive quarters of decline, and the “weakness has intensified since the middle of last year” (p. 8).