By Linda Hall • 07 June 2023 • 16:42
LARRY SUMMERS: Brexit ‘a big mistake' according to the former Secretary of Treasury
Photo credit: Chatham House
BREXIT was a “historic economic error” that helped to fuel the UK’s high inflation, a former US Treasury chief declared.
Talking to the BBC’s Radio 4 Today programme, Larry Summers said Brexit and other policies meant Britain’s economic problems were more acute than those of most other major countries.
“The UK’s economic policy has been substantially flawed for some years,” Summers said.
“Brexit will be remembered as a historic economic error that reduced the competitiveness of the UK economy, put downward pressure on the pound and upward pressure on prices, limited imports and the supply of labour,” he added.
This all combined to contribute to higher inflation, maintained the former Secretary of the Treasury who had advised bot Bill Clinton and Barack Obama.
Summers also slated the Bank of England, saying it had kept interest rates too low for too long, while the UK’s higher levels of inflation were reinforced by “very ill-judged” monetary policies that were too expansionary for too long.
The Bank of England has raised rates 12 times since the end of 2021, taking it to 4.5 per cent in May, although Summers said the only option was to stay the course with base rate hikes, although this would inevitably hit activity and growth.
“I’d be very surprised if Britain avoids a recession in the next two years,” he told the BBC.
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Originally from the UK, Linda is based in Valenca and is a reporter for The Euro Weekly News covering local news. Got a news story you want to share?
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