There was a poll in The Guardian newspaper that asked people that voted to leave the EU how much they would be willing to pay to secure Brexit. It concluded that there would be very little support for a Brexit which cost leavers (and everybody else) £1000 or more per year. Perhaps Mark Carney had this figure in mind when he appeared before the Treasury Committee, yesterday.
The Governor of the Bank of England estimated that UK GDP is 2% lower than anticipated in 2016. "Real household incomes are about £900 lower than we forecast in 2016. The question is why and what drove that difference. Some of it is ascribed to Brexit," Mr Carney told the committee. He told the committee that business investment in the UK was being hindered by uncertainty over the Brexit process and its aftermath, noting: "It's understandable why businesses are holding back - there's some big decisions that are about to be made - why wouldn't they want to wait until the path becomes clearer?" He suggested that this may lead to a sharp improvement in business investment once the post Brexit environment becomes clearer.
Mr Carney remains optimistic about the prospects for UK growth picking up after a very disappointing Q1 which saw anaemic growth of 1%. He told MPs that: "Our view is not that circumstances changed in the first quarter. It's more likely to have been temporary and idiosyncratic factors that slowed the economy."
Other economic news suggested that the deficit (the difference between governmental tax receipts and expenditure) had fallen from a high of 9.9% in the wake of the Global Financial Crisis to stand at 2% of GDP. That level of borrowing is the lowest since 2002. According to the Office for National Statistics, borrowing in 2017 came in at $40.5 billion (revised down from an earlier estimate of £42.6 billion). April’s borrowing of £7.8 billion was the lowest April borrowing figure since 2008.