Reeves: Brexit needlessly harmed British companies

Brexit had an even bigger impact on Britain’s economy than critics predicted, Rachel Reeves has said, as ministers have become increasingly bold in blaming the dire state of the nation’s finances on the decision to leave the European Union.

- MILLIE COOKE POLITICAL CORRESPONDENT

It comes with just over a month to go until the Budget, where the chancellor is expected to announce a swathe of tax rises to fill a financial black hole of up to £50bn and pin a portion of the blame on Nigel Farage and Brexit.

The chancellor told a regional investment summit in Birmingham that the UK's exit from the EU “needlessly” added costs to businesses, saying ministers are now “unashamedly rebuilding our relations” with the bloc.

Treasury officials are bracing for the OBR to lower its forecasts for productivity growth - a downgrade that is likely to create an extra shortfall of around £20bn. The gap is expected to be filled by a swathe of tax rises.

The PM and chancellor are reportedly planning to argue that this downgrade would not have happened were it not for Brexit, pinning the blame on the Reform leader for leading the campaign to take Britain out of the EU.

As the chancellor was speaking in Birmingham, Bank of England governor Andrew Bailey was warning that echoes of the 2008 financial crash are being seen in today's economy.

Mr Bailey told a Lords committee that recent events in US private credit markets have worrying similarities with the subprime mortgage crisis that triggered the financial crash.