Bank of England Bracing for Possible No-Deal Brexit

June 20, 2019

The Bank of England left the British Bank Rate at 0.75%, its level since a 25-basis point hike last August. The baseline forecast, which was formally reviewed at the prior meeting, anticipates further rate normalization, but assumed a smooth Brexit process that looks increasingly unlikely. Today’s statement identifies increased downside growth risks, projects flat GDP growth this quarter, and anticipates CPI inflation dropping below 2% in the second half of this year. “The monetary policy response to Brexit, whatever form it takes, will not be automatic and could be in either direction. The Committee will always act to achieve the 2% inflation target.”

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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