U.K.'s Reeves Says Brexit and Austerity Hit Harder Than Thought

• British finance minister Rachel Reeves has noted that Brexit, along with spending cuts by previous governments, had weighed more heavily on the United Kingdom’s (U.K’s) economy than originally thought as she readies a budget likely to include tax increases but also measures to boost growth.
• In comments reported by the Guardian newspaper, Reeves expressed that she was aiming to defy an expected downgrade in the economic growth forecasts from Britain's independent fiscal watchdog, the Office for Budget Responsibility (OBR).
• "We also know – and the OBR, I think, is going to be pretty frank about this – that things like austerity, the cuts to capital spending and Brexit have had a bigger impact on our economy than even was projected back then," she was quoted as saying by the newspaper during a conference in Birmingham. "That's why we are unashamedly rebuilding our relations with the European Union to reduce some of those costs that were, in my view, needlessly added to businesses since 2016 and since we formally left a few years ago."
• The OBR has estimated that Brexit will reduce Britain's long-term level of productivity by 4% compared with remaining in the European Union. The Bank of England Governor Andrew Bailey also noted that Brexit was likely to continue to weigh on British economic growth over the coming years. According to the International Monetary Fund (IMF) in its October World Economic Outlook Projections, the United Kingdom is forecasted to grow by 1.3% in 2025 and 2026. This reflects a 0.1% increase in its 2025 outlook relative to the IMF’s July update, but a 0.1% decrease in its 2026 outlook.
• Data published earlier showed Britain's public borrowing in the first half of the financial year was the highest on record except during the height of the coronavirus pandemic, keeping up the pressure on Reeves ahead of the November 26 budget.

(Sources: Reuters & IMF)