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Eurozone

Celebs, BoE weigh costs of Brexit

Friday, May 20, 2016 - 01:39

As British celebrities throw their support behind Britain staying in the EU, the Bank of England is reportedly looking at how to keep sterling markets functioning in the event of Brexit. But an intervention might not be necessary as the latest polls point towards a win for the status quo. Kirsty Basset reports.

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Actors Benedict Cumberbatch and Kiera Knightley are among more than 250 celebrities from the arts world who've voiced their support for Britain remaining in the EU. With a referendum on the issue just weeks away, they argue in a signed letter that Britain is more imaginative and more creative in Europe. They're not the only ones thinking about the looming vote. The Bank of England is reportedly looking at how to keep sterling markets functioning if Britain opts to leave the EU on June 23. (SOUNDBITE)(English) CHIEF ECONOMIC ADVISOR, CEBR, VICKY PRYCE SAYING: "There are expectations that the pound will fall very significantly should there be an exit vote. And of course you can do things to intervene to ensure that that is minimised because obviously if the pound falls significantly then that has implications for inflation." The BoE has already announced its willingness to provide banks with extra cashflow if needed around the Brexit vote, and to adjust interest rates if necessary afterwards. But has said nothing about intervening directly into foreign exchange markets by buying or selling currency, a step it hasn't taken since the pound fell out of the European Exchange Rate Mechanism in 1992. But it may not be necessary, with a recent Ipsos MORI poll finding 55 per cent support for staying in the EU, 37 per cent wanting to leave, and 8 per cent undecided. Meanwhile betting odds indicate the implied probability of a vote to stay in the EU rising to as high as 83 per cent.

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Celebs, BoE weigh costs of Brexit

Friday, May 20, 2016 - 01:39