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Carney tells banks to prepare for rate cut in event of Brexit


The Bank of England is expected to warn of cuts to inflation and interest rates if the UK votes to leave the European Union on 23 June.

The Sunday Times reports the central bank has already asked other institutions to prepare for a rate cut, ahead of setting out the economic implications of a Brexit vote in its inflation report later this week.

One bank chief executive told the newspaper he had been invited to Threadneedle Street for an informal discussion and was told to check whether the bank’s balance sheet could withstand an interest rate cut.

Bank of England governor Mark Carney has previously warned Brexit represents the biggest risk to UK growth.

Elsewhere, Chancellor George Osborne has argued leaving the EU would make mortgages more expensive and significantly impact house prices.

Appearing on ITV’s Peston on Sunday, ahead of the publication of Treasury research about the cost of Brexit, Osborne said: “I’m pretty clear that there will be a significant hit to the value of people’s homes and to the costs of mortgages. That is one example of the kind of impact, economic impact, that we get from leaving the EU.”



IMF warns Brexit could cause severe global damage

The IMF says Brexit could cause “severe regional and global damage” and is cutting its global growth forecast for the second time this year. A vote for a Brexit at the June referendum would disrupt established trading relationships and add to political strains in Europe stemming from the Syrian refugee crisis, the IMF’s semi-annual World Economic Outlook report […]


BoE: ‘Brexit uncertainty will hit lending’

The Bank of England’s Financial Policy Committee says uncertainty associated with the EU referendum could affect the cost and availability of credit. In the minutes of its latest meeting, the FPC says the referendum on 23 June is the “most significant near-term domestic risk to financial stability”. It adds that the uncertainty has been most […]


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