Gerard Lyons, a co-founder of Economists for Brexit, said that post-referendum economy was in “good shape” and said a recent rise in wages indicated the ability to deal with inflation.
He said a rise in product prices was not inevitable but said leaving the EU was a “dynamic process”.
Mr Lyons told Express.co.uk: “It’s not clear whether there will be a drop in living standards, there will be some squeeze maybe, but it’s a dynamic process.
“Let’s remember that the UK economy is in relatively good shape, the job market has been very strong.
Gerard Lyons predicted rising inflation would be counteracted with rising wages
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There will be a squeeze on living standards, a temporary one, but nonetheless a squeeze but it could be offset if wages rise far more sharply over the next year
“Of course there are too many people in temporary jobs and too many people on zero hour contracts, but notwithstanding that, the important thing is to focus not just on inflation over the next year but also on what happens to wages.
“Wages started to trend up recently, so if firms start to pay their staff more money and wages continue to rise that then will offset the impact of higher inflation.”
He said leaving the customs union would help the UK economy in the long term.
“Of course one has to remember that leaving the customs union in the United Kingdom – leaving the customs union of the EU – would allow Britain to decide what to do to tariffs.
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Continued cooperation with the EU to tackle terrorism and international crime.
“And the customs union tariffs associated with the membership of the European Union results in food prices being maybe, according to some research, as much as 18 per cent higher than world food price levels, so food price inflation could fall.
“That’s the longer term aspect that we need to bear in mind but… there will be a squeeze on living standards, a temporary one, but nonetheless a squeeze but it could be offset if wages rise far more sharply over the next year.”
Gerard Lyons said leaving the customs union would leave Britain better off in the long term
Mr Lyons, who worked as Boris Johnson’s chief economic advisor while he was the Mayor of London, said leaving the single market and the customs union would be a “win-win” situation.
“Clearly, most countries across the world – all of them with the exception of North Korea have access to the single market,” he said.
“We can be outside the single market, gain from that and at the same time have access to it.”
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