BREXIT is costing the British economy £800 million a week - £80 billion since the 2016 referendum, a Bank of England policymaker has said.

Gertjan Vlieghe, an external member of the central bank's Monetary Policy Committee, also suggested that the shock of a no-deal divorce could see interest rates slashed.

He explained that, since the June 2016 vote, two per cent had been shaved off GDP. This, he calculated, amounted to a loss of around £800 million per week or £40bn a year.

"The analysis suggests that since the vote in June 2016, we have lost two per cent of GDP relative to a scenario where there had been no significant domestic economic events.

"That amounts to around £40bn per year or £800m per week of lost income for the country as a whole," Mr Vlieghe told an audience in London.

The rate-setter pointed to a collapse in business investment into the UK, which had been stuck at zero while in G7 peers it had accelerated to six per cent a year.

"Firms have been saying in a number of surveys that the uncertainty about our future relationship with the EU is a source of concern for them that has been weighing on their investment spending as plans for expansion have, on average, been scaled back," Mr Vlieghe said.

Labour’s Owen Smith described his figures as "eye-wateringly high" and warned that the NHS would suffer as a result.

"Damaging our economy makes addressing these problems harder, not easier. It means less money for the NHS and our other national priorities.

"This is a vivid and painful reminder that the promises of Brexit are not being - and cannot be – delivered," said the Welsh MP.

Mr Vlieghe also warned that interest rates were more likely to be cut than hiked if Britain crashed out of the EU without a deal.

"In the case of a no-deal scenario, I judge that an easing or an extended pause in monetary policy is more likely to be the appropriate policy response than a tightening," he said.

His comments came with just over a month to go before Britain's departure from the bloc on March 29 and with Parliament in a deadlock over Brexit, having rejected Theresa May's initial deal.

Last week, the Bank slashed its growth forecast for the economy and warned about the mounting risk of a recession in the event of a no-deal Brexit.

On Wednesday, Mark Carney, the Bank's governor, urged politicians to find a Brexit solution.

Mr Vlieghe said a no-deal outcome without any transitional arrangements would lead to "economic disruption, which could possibly be severe".

If a deal were reached, which included a transitional period, the pound would be likely to strengthen, which could lead to a tightening of monetary policy, he said.

However, Mr Vlieghe noted how recent economic data, including inflation and GDP, pointed to a sluggish economy.

"Given that the data even in the past few weeks are suggesting the slowdown is continuing into the early part of this year, both domestically and globally, a lot needs to go right for this forecast to come to pass.

"I feel I can probably wait to see evidence of growth stabilising and inflation pressure rising before considering the next hike in Bank rate," he added.

January inflation fell to a two-year low of 1.8 per cent and undershot the Bank's 2.o per cent target, while recent GDP data revealed that economic growth slowed in the fourth quarter of 2018.