Newspaper article The Evening Standard (London, England)

BREXIT BRITAIN: THINGS CAN ONLY GET WORSE; INFLATION UP AGAIN AS FAMILIES FACE NEW SQUEEZE ON LIVING STANDARDS; Stopping Brexit Would Avert Disaster, Claims Paris-Based Think Tank

Newspaper article The Evening Standard (London, England)

BREXIT BRITAIN: THINGS CAN ONLY GET WORSE; INFLATION UP AGAIN AS FAMILIES FACE NEW SQUEEZE ON LIVING STANDARDS; Stopping Brexit Would Avert Disaster, Claims Paris-Based Think Tank

Article excerpt

Byline: Joe Murphy, Kate Proctor and Jonathan Prynn

STOPPING Brexit could avert a disaster for Britain's economy, international experts said today, as inflation hit its highest rate for five and a half years. In a bombshell report, Paris-based think tank the OECD said growth was falling fast from 1.6 per cent this year and would be just one per cent next year.

Painting an apocalyptic vision of a "hard" exit from the European Union in 2019, it warned that things could get far worse. A disorderly Brexit without a trade deal "would trigger an adverse reaction of financial markets", driving down the pound's value. The OECD said "investment would seize up" and higher prices would throttle consumption.

It warned of "major" economic effects if Scotland and Northern Ireland broke away from the UK because of Brexit and "political instability". But the OECD found that if there was a decision to halt Brexit, such as by a second referendum, the "positive impact on growth would be significant". Soaring food and transport costs pushed the consumer prices index to a peak of three per cent in September, a level not seen since April 2012 and up from 2.9 per cent in August.

Economists also warned of a hike in interest rates next month and a PS1 billion rise in business rates next year as a result. Bank of England governor Mark Carney admitted to MPs he would probably have to write a letter to the Chancellor next month explaining why inflation was so far off the two per cent target.

With earnings crawling up at just over two per cent, the rising cost of living left the average family with a real-terms income cut of 0.6 per cent. Experts said low-income families would be harder hit because of the cap on benefits.

The Resolution Foundation think tank found that a working family with two children was set to lose PS315 a year. …

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