Brexit cuts UK productivity and spending, Bank of England says

London. The UK’s planned departure from the European Union has cut the nation’s productivity by between 2 per cent and 5 per cent since the 2016 referendum, according to a report published by the Bank of England.

Senior managers at British companies are spending several hours a week planning for Brexit, researchers including Nicholas Bloom said in a working paper published on the Bank of England website Friday. Investment has fallen by about 11 per cent in the three years since the Brexit vote, the report said. The drop in spending has occurred later than forecast at the time of the vote, reflecting the “size and persistence of this uncertainty.”

The paper is based on a survey of 5,900 UK firms accounting for about 3.7 million employees, or about 14 per cent of private sector jobs in the UK, the authors said. The Bank of England, University of Nottingham and Stanford University collaborated on the research.

British lawmakers will reconvene in the House of Commons on Tuesday, with some politicians seeking to combat a no-deal Brexit before a monthlong suspension kicks in.