The British’s decision to withdraw from EU has, according to central bank, cost average household in country 900 pounds so far. The British economy is now about 1.5 percent smaller than expected on eve of Brexit referendum, said governor of Bank of England, Mark Carney, in front of Parliament’s finance committee. This is “a lot of money”.
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The decision to leave alone allowed value of pound to fall by about 15 percent, which in turn drove price of imported goods and thus also inflation rate. Expectations for a positive development of economy also decreased, while investment decreased by four percent. This was clear in context of Brexit decision and contributed to decline in economic growth.
However, once again, a little more confidence has returned to British economy since London government agreed with EU on a roadmap for transitional period of exit, said Carney. The decisive factor for furr development is wher a final agreement with EU will be reached this year.
The Bank of England has recently renounced an increase in its key interest rate in view of weakening economy. The key set for supplying banks with money remained at 0.5 percent. Gross domestic product grew by only 0.1 percent in first quarter, and thus as slow as 2012. Many experts now expect an increase in interest rates in August, but re should be hints for a revival of economy.
