The UK economy has been “permanently damaged” by Brexit, according to a senior economist.
It comes ahead of chancellor Jeremy Hunt setting out the Autumn Statement and after Paris deposed London as Europe’s biggest stock market.
Hunt has already confirmed that everyone will be paying more tax and there will be spending cuts.
He has pledged to ensure the most vulnerable are protected, though acknowledged the difficult decisions facing the Government.
Michael Saunders, a former policymaker at the Bank of England, suggests that there would not be what he described as an austerity budget this week had it not been for Brexit.
The French stock market now has a combined value of $2.823trn, marginally above the UK stock market which is worth $2.821trn altogether, according to figures from Bloomberg.
In 2016, the year of the Brexit referendum, British stocks were collectively worth $1.5trn more than those listed in Paris.
The pound has also dropped by 13% in value against the US dollar this year, while the Euro fell by 9.2% against the American currency.
Saunders underlined the impact that Brexit has had on the economy of the UK.
“The UK economy as a whole has been permanently damaged by Brexit,” he said.
“It has reduced the economy’s potential output significantly, eroded business investment.
“If we hadn’t had Brexit, we probably wouldn’t be talking about an austerity budget this week.
“The need for tax rises, spending cuts, wouldn’t be there if Brexit hadn’t reduced the economy’s potential output so much.”