BoE deputy warns Brexit delay may further dampen business investment
Deputy governor of the Bank of England Ben Broadbent warned on Monday that another Brexit delay might damage the long-term economic outlook as the resulting uncertainty weighed on investor spirits.
The deputy governor told the Press Association that another delay past 31 October would hit the UK economy hard, with the country facing the longest span of declining business investment since the second world war.
“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 said.
“If you continually expect news to arrive imminently - a resolution - then that can have quite a depressing effect on investment,” he said.
He added that a Brexit deal would lead to “quite a strong bounce-back in investment.”
Broadbent also reiterated the BoE’s guidance that future interest rate increases would be "limited and gradual", albeit while adding that the "emphasis is on the 'gradual' bit".
He also said he did not know whether Bank would have 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.”
On the replacement of Mark Carney as BoE governor, he had not yet decided whether to put his name forward: “It’s a big job [...] I have lots of things to think about before I make that decision.”