A former Bank of England policymaker said the UK's exit from the EU is one of the reasons why it is now entering a period of austerity.
Michael Saunders, who left the Bank's Monetary Policy Committee this summer, told Bloomberg TV that leaving the European Union had caused permanent damage.
Saunders said the last six years of government had been a chaotic period, with five prime ministers and seven chancellors.
The upheaval included the Brexit vote, the depreciation of sterling, a period of political uncertainty, the Pandemic, and then renewed political uncertainty, says Saunders.
The legacy of this period is that the economy's potential output has been weak Q: So the City of London has been damaged as it loses its crown as the biggest European stock market to Paris?
Saunders says the impact has been wider:
The UK economy as a whole has been damaged by Brexit. If we hadn't had Brexit, we probably wouldn't be talking about an austerity budget this week. If Brexit hadn't reduced the economy's potential output, there wouldn't be a need for tax rises and spending cuts.
Saunders concludes that the key is to raise potential output, and that Liz Truss was right to diognose this as the problem.
There was a wrong way to reduce taxes and deregulation.
Instead, Saunders says the government should focus on improving trade links with the EU, strengthening education and trading, and tackling the worrying rise in long-term sickness that has reduced the UK's workforce.
After the autumn budget, Chancellor Jeremy Hunt warned that everyone will be paying more tax, while public services are expected to be hit with severe cuts, according to the Chancellor's son, Jeremy Hunt.
We learned last Friday that the UK was the only major advanced economy to shrink in the last quarter, with business investment now 8.4% below pre-pandemic levels.