BoE’s Broadbent: Underlying investment trend is still negative

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In a speech delivered at Imperial College Business School, London, Bank of England Deputy Governor Ben Broadbent said that according to a BoE survey, the most negative economic impact on business is likely to be felt in a no-deal exit scenario with no agreed transition period. 

Key quotes

  • Business investment fell in every quarter last year and surveys suggest the underlying trend is still negative.
  • One implication is that the overall hit to investment is worse than it need be if firms have unrealistic expectations about how rapidly the situation is likely to be resolved.
  • Downside risks have particularly marked effects on decisions that are costly to reverse.
  • However long the process actually lasts, investment is likely to perform better if firms don’t continually expect an early resolution in the meantime. 
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