BOE's Vlieghe: Policy outlook could easily go in either direction with a cliff edge Brexit
Further comments by BOE member, Gertjan Vlieghe
- Public uncertainty about BOE policy reflects general political and economic uncertainty
- Don't have to see much of a hit to demand to justify cutting rates to near zero
- More likely than not rates would reach lower bound after a no-deal Brexit
- Says that 0.25% is not the lower bound for UK rates, it is lower
- But says it is possible BOE may nee to raise rates if inflation expectations are deanchored by a no-deal Brexit outcome
The only takeaway from his comments here is that there are still a lot of assumptions and "ifs" at play with regards to BOE monetary policy. And until Brexit becomes clearer, the direction of the central bank's monetary policy will also be as vague as what kind of Brexit may materialise in the coming months.