FILE PHOTO: A man walks past the Bank of England in the City of London, Britain, February 7, 2019. REUTERS/Hannah McKay/File Photo
May 13, 2019
LONDON (Reuters) – Britain’s economy risks damage if Brexit is delayed beyond its latest Oct. 31 deadline because companies would continue to hold back on investment, Bank of England deputy governor Ben Broadbent was quoted as saying on Monday.
“It’s pretty clear that investment has been feeling the consequences of the uncertainty about Brexit and particularly the possibility of a bad outcome,” Broadbent told the Press Association news agency.
“If you continually expect news to arrive imminently – a resolution – then that can have quite a depressing effect on investment,” he said.
By contrast, a Brexit deal would lead to “quite a strong bounce-back in investment.”
Broadbent reiterated the BoE’s guidance that future interest rate increases would be limited and gradual, adding the “emphasis is on the ‘gradual’ bit of limited and gradual.”
He said he did know whether the British central bank would need to increase rates or cut them in the event of a no-deal Brexit shock to the economy.
“I don’t know. I really don’t, because I don’t know how much the exchange rate will move,” he said.
Several other top BoE officials, including Governor Mark Carney, have said a rate cut would probably be needed to help the economy weather the shock of leaving the European Union with no deal.
On whether he will put his name forward as a candidate to succeed Mark Carney as BoE governor, Broadbent said: It’s a big job…I have lots of things to think about before I make that decision.”
(Writing by William Schomberg; Editing by Peter Graff)