In a recent interview, former United States Treasury Secretary Larry Summers said that Brexit will be remembered as a “historic economic error” which could have not only damaged the United Kingdom’s economy but helped increase the country’s inflation. Meanwhile, inflation in the Eurozone has fallen to 6.1 per cent in May 2023 down from 7.0 per cent, in April.
What did Summers say about the UK economy?
Speaking to BBC Radio 4’s Today Programme Summers, on Thursday, 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 import goods and limited in some ways the supply of labour.”
He added, “All of which contributed to higher inflation.” One of the most prominent economists who also served as the US Treasury Secretary, Summers also spoke about how the UK economic policy has been “substantially flawed for some years,” speaking particularly about its exit from the European Union (EU) and how it has driven costs higher in Britain.
Summers also went on to criticise officials at the Bank of England for Britain’s high inflation and said that the country’s problems have been “reinforced by very ill-judged monetary policies”.
This comes as the UK has been witnessing a cost-of-living crisis and soaring inflation. Last week, the country’s Office for National Statistics reported that inflation remains stubbornly high at 8.7 per cent in April, but it is down from 10.1 per cent in March.
Earlier this month, a report by the London School of Economics (LSE) said that British households have paid billions to make up for the extra cost of trade barriers on food imports from the EU. Notably, the UK also has the highest rate of inflation among the Group of Seven (G7) nations.
Eurozone inflation falls to 6.1 per cent
Meanwhile, inflation in the 20 countries which use the euro and are referred to as the ‘eurozone’ fell to 6.1 per cent in May 2023, down from 7.0 per cent the month prior, reported EU’s Eurostat agency. This drop also takes the countries’ annual inflation closer to the European Central Bank’s target of two per cent.
The decrease in inflation has been attributed to a drop in energy prices, while food and alcohol were the main components driving inflation, rising 12.5 per cent in May which was one per cent lower than the month before. Last year, the Eurozone was struggling with high inflation at 10.6 per cent due to the effects of the Russian invasion of Ukraine and supply chain issues post-Covid.
(With inputs from agencies)
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