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In a prepared speech delivered at the MMF Monetary and Financial Policy Conference held at Bloomberg in London, Bank of England (BoE) rate-setter Gertjan Vlieghe argued that in a no-deal Brexit scenario, it was more likely for a stimulus to be more required rather than tightening while reiterating that the response wouldn’t be automatic.

“The slack in the United Kingdom (UK)  economy is probably increasing again, has a significant impact on the policy outlook,”  Vlieghe added. “A  near-term Brexit deal that reduces uncertainty and gives business time to prepare might put gradual, limited rate hikes back on the agenda, eventually.”

The GBP/USD pair’s reaction to these comments was muted and it was last seen trading at 1.2642, adding 0.3% on a daily basis. Below are some additional quotes, per Reuters.

“Monetary firepower is now considerably less than in periods before previous recessions.”

“Rate-setters cannot respond to bad news as effectively as good news, should make them patient on rate hikes.”

“Without paying interest on reserves, the BoE would effectively lose inflation target and independence for an uncertain length of time suggests looking at less radical options first.”