Bank is prepared for Brexit outcomes as interest rates stay on hold

Bank of England governor Mark Carney has warned interest rates could rise in the event of a no-deal Brexit if a cliff-edge withdrawal sends the pound into freefall.
Mark CarneyMark Carney
Mark Carney

Mr Carney said there are scenarios where policy “might need to be tightened in the event of a no deal, no transition Brexit”, should a plunge in the value of the pound cause inflation to surge and impact UK production.

He stressed a no-deal Brexit was “not the most likely scenario”, but said the Bank had to be prepared for the worst case and this could mean rates moving in “either direction”.

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The Bank’s boss also cautioned that monetary policy might not be able to help soften the economic blow of a no-deal disorderly Brexit.

His comments came as the Bank’s nine-strong Monetary Policy Committee voted unanimously to leave interest rates unchanged at 0.75 per cent as it awaits the outcome of Brexit talks.