Bank of England Calibrating Brexit Response

Reaction comments from Brian Coulton, Chief Economist at Fitch Ratings, on 14 July 2016 BoE interest rate decision

“It’s clear there’s going to be a monetary policy response, but the Bank are giving themselves a bit more time to calibrate the scale and type of easing that is appropriate.”
“They seem quite convinced that there will be a significant slowdown in investment — and highlight some anecdotal and survey evidence on this already — but the boost to future inflation from the weaker pound complicates the decision somewhat.”
“We should not expect too much from monetary policy here in terms of preventing a significant slowdown in growth. Rate cuts or renewed asset purchases will not prevent firms from delaying investment or hiring decisions in the face of post-Brexit uncertainty. The MPC will be in defensive mode — trying to ensure that there is not an additional headwind on growth from tighter credit conditions.”
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