- A ‘disorderly’ Brexit may force the UK’s central bank to cut interest rates
- The Bank of England’s current projections are based on a smooth transition
- It warned that a ‘sharper Brexit’ could put Britain on a different economic path
The Bank of England boss warned last night that a ‘sharper Brexit’ could put Britain on a different economic path to the one it’s on
The Bank of England could cut interest rates again in the event of a ‘disorderly’ Brexit, governor Mark Carney said last night.
He said a ‘sharper Brexit’ could put Britain on a different economic path to the one it is on.
Mr Carney said the bank’s forecasts were based on a smooth transition as the UK left the EU.
But he told an audience at the Society of Professional Economists in London that a different outcome might see a similar situation to that which followed the 2016 referendum, when the bank’s Monetary Policy Committee (MPC) cut interest rates to a historic low of 0.25 per cent and added £60billion to its quantitative easing programme.
Mr Carney said: ‘If the transition were disorderly, or the end state agreement materially worse than the average potential outcome, then the MPC could once again be confronted by a trade-off between the speed with which it returns inflation to target and the support policy provides to jobs and activity.
‘On this path, the MPC can be expected to set policy to manage any trade-off using the framework it applied following the referendum.’
Bank Governor Mark Carney repeated his claim that households are £900 a year worse off than they would have been without Brexit
Mr Carney said the Bank would be ready for any outcome. He also repeated his claim that Brexit had so far cost households £900 each.
However, he also said that if Theresa May and her Government broke the current deadlock with Brussels it could spark an economic boom.