Political uncertainty and Brexit will slow UK recovery in 2022, economists predict

Political uncertainty and Brexit will slow UK recovery in 2022, economists predict

The UK will trail other developed countries in its economic recovery from the pandemic in 2022, with economists polled for a Financial Times survey predicting that it will be held back by political uncertainty and the lingering after-effects of Brexit.

Of almost 100 economists, a majority said that UK living standards would worsen in the year ahead, with poorer households hit hardest by soaring inflation and higher taxes.

The biggest challenges they saw facing the country’s economy were global in nature: high energy prices and broader pandemic-related inflationary pressures; sustained labour shortages and disruption to supply chains; continuing waves of virus infections; and the mounting risks of climate change.

But many argued that the UK would find it harder to deal with these shocks than its peers, because fiscal support was tapering, Brexit was damaging trade and exacerbating supply bottlenecks, and political uncertainty looked increasingly likely to deter investment.

“A combination of a ragged edge over Brexit and political uncertainty will continue to hamper what might otherwise have been a strong recovery,” said Jagjit Chadha, director of the National Institute of Economic and Social Research.

“Recoveries are driven by optimism about the future . . . Brexit will impose chronic pessimism about the future of the UK economy,” said