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UK held back by staff shortages, Brexit and mortgage costs, says top economist

A shortage of workers, expensive mortgages and the continuing effects of Brexit are all weighing on the economy as the UK shapes up to be the weakest major G7 economy this year, the head of a leading thinktank has said.

UK held back by staff shortages, Brexit and mortgage costs, says top economist
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  • Shared from The Guardian
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  • February 01, 2023
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  • 1 minute read
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Paul Johnson, the director of the Institute for Fiscal Studies, said there were special factors holding back growth in the UK as politicians and analysts responded to a warning from the International Monetary Fund that the UK economy would shrink by 0.3% in 2023.

Speaking on Radio 4’s Today Programme on Tuesday, Johnson said the UK’s performance did not look quite so bad if 2022 and 2023 were considered together, since the IMF estimated growth of 4.1% last year would be the highest in the G7.

But Johnson said other countries were not being affected to the same extent as the UK by shortages of labour – identified by the IMF as one factor holding back the UK. Johnson said the UK labour force had half a million fewer people than before the pandemic as a result of people retiring early and fewer EU immigrants.

“That’s not affecting any other country in Europe … That’s a particular challenge for us,” the IFS director said. The continuing “challenges from Brexit” and the rapid impact of higher interest rates on mortgage costs were also factors, he added.

Read more at The Guardian

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