Thread by @TorstenBell

While the political debate about Brexit goes in circles, families have already seen their incomes hit by £1,500 vs expectations since the 2016 referendum.
New report: Counting the Cost from @JamesSmithRF is out today resolutionfoundation.org/publications/c…

Weaker GDP growth is getting a lot of the headlines (and will again today with new stats). By the end of 2018 our economy was likely to be 1.1% smaller than the OBR expected pre-referendum = around £23 billion, or £800 for every household in the UK.

But household incomes have done significantly worse than GDP - because consumers have faced higher inflation (driven by sterling falls driving up import prices). Another reason not to be so relaxed about big falls in the value of the pound if driven by worries about our economy

Underperformance since 2016 is NOT just about the recent global slowdown (EU + China) - GDP growth has gone from near the top to near the bottom of the G7 and the UK has seen the biggest fall in income growth amongst advanced economies

No one sensible can say definitively how much of this lost income is exclusively down to the Brexit effect but it’s hard not to conclude that Brexit must be the single biggest factor

Long run impact of Brexit will of course depend on the eventual trading relationship we agree with the EU - but this isn’t just about where we end up its about how we get there. The current failure of our politics to resolve this is far from cost free - uncertainty has picked up

The significant hit to living standards should remind politicians in all parties of how high the stakes are at present (much more than slower GDP growth implies), and that how the country goes forward, not just where it is heading, matters for our living standards