Bank of England MPC: Brexit worries intensify
Commenting on a Brexit, Chris Williamson, chief economist at Markit, said:
“No surprises as the Bank of England’s Monetary Policy Committee left interest rates unchanged at its latest meeting. All nine committee members voted to keep policy on hold, with the Bank joining the IMF in warning about the extent to which Brexit uncertainty has the potential to damage the economy, in the short run at least.
“Today also brought fresh signs of how uncertainty regarding the June vote on the UK’s membership of the EU is already unsettling business confidence and leading to the postponement of decision making.
“The latest quarterly survey of marketing executives from Markit and the IPA showed business confidence slumping to the lowest since 2012 in March, leading to a disappointingly meagre upturn in marketing budgets. With marketing spend typically acting as a good leading indicator of wider business investment, this raises worries about the extent to which companies are pulling back on capital expenditure. Brexit concerns appear to be exacerbating existing worries about the extent to which UK and global demand remains worryingly fragile.
“Growth has also already shown signs of weakening in the first quarter, with the PMI surveys indicating that the economy is likely to have expanded by just 0.3-0.4%, down from 0.6% at the end of last year. It’s highly likely, therefore, that the second quarter could see growth slow further, possibly considerably if anxiety about the referendum intensifies, turning the focus to the possible need for more stimulus.”
UK IPA ‘Bellwether’ Survey