Would Brexit Lead to a UK Rate Cut? – Investec
Research Team at Investec, notes that the Sunday Times was reporting
yesterday that the Bank of England has asked banks to prepare for the
possibility of a rate cut if Britain leaves the EU, without attributing
the statement to any particular source.
Key Quotes
“Certainly
a so-called Brexit would leave policy makers with a complex situation
to deal with. Although there is debate whether they would cut interest
rates to combat a likely slowdown of growth (forward-looking PMI data is
already slowing), or whether they would be forced to raise interest
rates if the Pound substantially weakened and threatened the inflation
outlook. Perhaps, if this report is to be believed, it would be one and
then the other.”
