Britain’s oldest think tank on Brexit
- Boris Johnson would need two full terms as prime minister to fulfil his pledge to “level up” the British economy in the wake of Brexit, according to the National Institute of Economic and Social Research.
- In a warning before next month’s budget, Britain’s oldest economic thinktank says the government’s plan to raise investment in infrastructure projects by about £20bn a year can have only a modest impact on the UK’s dismal productivity levels.
- Johnson has pledged to invest in new transport projects and other large public works but NIESR says the positive impact on the economy will be less than 0.5% of GDP over the long run, compared with an estimated 3-4% cost of Brexit.
- In a blow to the chancellor, NIESR says Sajid Javid will fall short of achieving his growth target of 2.8% per year while his new budget rules will probably be trashed by public spending at the levels promised in the election campaign. The Bank of England has already warned that Brexit will strike a blow to British productivity as higher trade barriers harm efficiency gains, while growth can only run at 1.1% on average until 2023 without driving up inflation.