July 23, 2019 / 7:45 AM / 2 months ago

BoE's Saunders says Brexit might stop rate hikes - Bloomberg

FILE PHOTO: Pedestrians walk past the Bank of England in the City of London, Britain, May 15, 2014. REUTERS/Luke MacGregor

LONDON (Reuters) - Brexit might stop the Bank of England from raising interest rates, Michael Saunders, one of the policymakers who has talked in recent months about the likely need for higher borrowing costs, was quoted as saying by Bloomberg.

The discrepancy between the BoE’s base-case assumption of a smooth Brexit and investors’ fears that Britain will leave the European Union without a transition deal meant that BoE’s official outlook might not be “a key driver of people’s policy vote,” Saunders said in an interview.

“The economy right now is clearly not overheating - the underlying pace of growth, stripping out all of the funny effects, inventories, car shutdowns and so forth, is weak and below trend,” Saunders said.

Writing by William Schomberg; editing by Costas Pitas

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