Brexit was a “historic economic error” which has hurt the UK economy and helped to drive up inflation, Larry Summers, the former US Treasury Secretary has warned.
Speaking to BBC Radio 4’s Today programme, Summers stated that the UK economic policy has been “substantially flawed for some years” and singled out the exit from the European Union as a factor driving up costs.
He explained: "I think Brexit will be remembered as a historic economic error that reduced the competitiveness of the UK economy, put downward pressure on the pound and upwards pressure on prices, limited imports of goods and limited in some ways the supply of labour."
Summers adds that the Bank of England also blundered: "I think that was reinforced by very ill-judged monetary policies that were substantially too expansionary for too long."
But he thinks the BoE should stick to the medicine of higher rates, rather than stopping the treatment too soon and risk “a recurrence of the underlying infection”.
"Usually when you’re prescribed a course of medication, even if the drugs are not so pleasant themselves, and even if they possibly have some side effects, it’s usually better to take the whole course of medicine, the first time it’s prescribed than to stop taking the medicine early," he said.