Analysts at Westpac, points out that the Bank of England highlighted the deterioration in conditions that the UK is facing in the absence of an agreement over Brexit.
Key Quotes
“In particular, the Committee noted “Brexit uncertainties have intensified considerably since the Committee’s last meeting”. Further, “UK bank funding costs and non-financial high-yield corporate bond spreads have risen sharply and by more than in other advanced economies”. In addition to these specific UK concerns, in line with other central banks, the Bank of England also believe that “the near-term outlook for global growth has softened and downside risks to growth have increased”. It is difficult to see conditions being supportive of further rate hikes by the Bank of England. In our view, the risks for the UK are instead heavily skewed to the downside.”
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