Adur, West & East Worthing Party including East Arun

Bank of England warning

The impact of Brexit will contribute to a dramatic drop in real-terms pay this year, the Bank of England has warned, with average workers due to be left hundreds of pounds out of pocket.

Inflation will be higher than pay growth, the Bank’s Governor Mark Carney predicted – marking the first year since 2013 that workers have been hit by a real-terms cut in take-home pay.

Salaries will be almost £1,000 lower than forecast before the Brexit vote, ministers have been warned, and £320 down on predictions just three months ago.

The grim outlook, delivered four weeks before the general election, was “another sign of the Brexit squeeze”, the Liberal Democrats warned.

It made Theresa May’s plan – if she wins the election – to pull Britain out of the EU single market and customs union “even more reckless than ever”, the party said.

Even before the fresh squeeze to living standards, the decade was already on course to be the worst for pay growth for more than 200 years, an independent think tank said.

In more bad economic news, industrial output dropped by 0.5 per cent in March and the construction sector by 0.7 per cent, as the trade deficit grew.

Party Comment

Vince Cable, the Lib Dem treasury spokesman, said: “Consumer debt drove a short-term boost in the wake of the Brexit vote, but it is now clear that this is rapidly running out of steam…

.. Growth has slowed to a crawl, production output is turning downwards, and our economy has not been in a more worrying state since the aftermath of the 2008 financial crash.