Comparing the OBR’s pre-Brexit Forecast with the Brexit Reality - People's Vote

Comparing the OBR’s pre-Brexit Forecast with the Brexit Reality

New figures released today by the OBR have shown that wages and investment are significantly lower than was forecast before the Brexit referendum.

In another sign that Brexit is hitting Britain’s economy hard, there is a widening gap between where economy was thought to be heading before the referendum, and how it has performed since. Perhaps most worryingly, business investment is now a full 15% lower than the OBR forecast in 2016, and it fell by 0.9% last year.

The result is £330 less a year in the average British worker’s pocket than they would have had.

Economic indicators that have been hit by Brexit include:

  • Inflation 1.6% higher than predicted
  • Business investment £28 billion a year lower
  • Average earnings £330 a year lower

 

Commenting, Jo Stevens MP, a leading supporter of the People’s Vote campaign, said:

“While Brexiters in Parliament continue to argue amongst themselves, the mess they have got us into is already making people in this country much worse-off.  

“Brexit is already costing people up and down the UK hundreds of pounds in lost annual earnings, showing the price we are all having to pay for the ideological project of Brexiters like Boris Johnson and Jacob Rees-Mogg.

“Nobody voted to be poorer as a result of Brexit. Now that the real costs of leaving the EU are known, and now that so many of the promises made in 2016 have been broken, it’s time to give the public the final say. That’s why huge numbers will be marching on March 23 demanding a People’s Vote.”

Indicator

2016 Forecast*

Brexit Reality*

Percentage Difference*

2016 Absolute Value

Absolute Difference

Inflation (%)

4.4

6.0

1.6

N/A

N/A

Business Investment Growth (£ million)

15.2

0.2

-15.0

187031

-28033

Average Annual Earnings (£)

10.0

8.8

-1.2

28306

-330

*Compound % change for the years 2016, 2017 and 2018

 

Notes to Editors

2016 Forecast is based on the OBRs forecasts in their “March 2016 Economic and Fiscal Outlook” (link)

Brexit Reality based on OBR’s November 2017 and March 2019 “Economic and Fiscal Outlook” (link 1, link 2)

ONS figures are used for the 2016 level of business investment - we have used the “Business Investment in the UK Statistical bulletins” (link)

ONS figures used for 2016 average annual earnings (link)

 

2016 Forecasts:

Indicator

2016

2017

2018

Total (Compound)

Inflation

0.7

1.6

2

4.4

Business Investment

2.6

6.1

5.8

15.2

Average Earnings

2.6

3.6

3.5

10.0

 

2016-2019 Figures:

Indicator

2016

2017

2018

Total (Compound)

Inflation

0.7

2.7

2.5

6.0

Business Investment

-0.4

1.5

-0.9

0.2

Average Earnings

2.8

2.8

3

8.8